The Importance of D&B’s PAYDEX Score

The PAYDEX score is issued by Dun & Bradstreet, the largest credit-reporting agency in the world. They have over 66 million companies in their database. When a credit grantor is looking to determine the creditworthiness of an applicant, in many cases they will base their decision on the PAYDEX score of the business.

The PAYDEX score should be the number one focus when building corporate credit.  The score helps credit grantors determine how quickly a corporation is likely to pay. The PAYDEX score indicates the payment performance range from 1 – 100 and is calculated using up to 875 payment experiences from trade references reported to D&B.  The PAYDEX breaks down, into further detail, the manner in which payments are made.

In order to obtain a PAYDEX score, at least five trade references must report to D&B about the company’s payment history. The five trade references must grant credit terms to the business and then report the payment experience after payments have been made.  Knowing this, it is very advantageous to work with companies who grant you credit and report your payment history to D&B.

If you have existing vendors, you can ask them to report to D&B.  If you are a new company and/or do not have five trade references, you can work with Corporate Credit Fast Track Program. The program assists you to establish relationships with approved companies that can become trade references. Our network of companies will offer of guaranteed line of credit for their products and services and report your payment history to D&B. The most difficult part of obtaining credit is finding a company to grant credit without having any existing credit.

The following is the key for the D&B PAYDEX score. The goal for building credit will be for your PAYDEX score to be 80 or higher. By maintaining a score of 80 or higher, you will be treated as a company that has no blemishes on your credit report. In order to obtain that score, five trade references must have reported to D&B.  Each payment experience will be weighted to determine the overall score.

If a company has five references and all are paid on time or as agreed, the company would most likely receive a score of 80.  If all five have the same credit line amounts and one reports that the company paid in discount terms, a score of greater than 80 will be granted.

On the other hand, if one reports that the company paid late, a score of less than 80 will be granted.  The score of 100 is given for a payment that is made before a bill or invoice is generated.  A score of 90 is given for a payment made during the discount terms. A score of 80 is given if the company pays as agreed. If a payment is late, the company will receive lesser scores. A credit line of $10,000 will weighted more than a credit line of $500.