Establishing good credit is vital to business growth.
It becomes even more important when considering to apply for a business loan. You’ll likely come across the Dun & Bradstreet PAYDEX score.
But what is a Paydex score (Or “Who are Dun & Bradstreet?”). You have valid questions – and they’re more important than you think.
Similar to a personal credit score, a Paydex score is a business credit score issued by Dun & Bradstreet. It represents how likely you’re to pay your suppliers and vendors on time. A Paydex score ranges between 0 and 100.
A higher score indicates you’re more likely to settle your bills on time or in advance. When your score is above 80, you’re considered low risk based on your payment history.
The lower the Paydex score, the higher your risk of late payment.
- 0-49: High risk (Payments made 31 to 90 days or more late)
- 50-79: Medium risk (Payments made 15 to 30 days or later)
- 80-100: Low risk (Payments made 30 days early or on time)
Increasing your Paydex score means staying on top of your accounts and monitoring reports to Dun & Bradstreet. Here are six steps to improve your short and long-term score.
1. Pay Bills Early
Aim to pay your bills on time; it’s better if you can pay them earlier. If you pay the bills up to 20 days earlier on the big accounts, you’ll majorly impact your Paydex score.
2. Open Tradeline Business Accounts
You should open and pay balances on your tradeline account early enough to the vendors and suppliers. It gives Dun & Bradstreet positive feedback when determining your credit score.
3. Ask Suppliers and Vendors to Report to Dun & Bradstreet
Suppliers and vendors must send reports to Dun & Bradstreet (including early and on-time payments). These reports help calculate the Paydex score. If there are vendors not reporting these transactions, ask them to report the payments.
If the vendors don’t report the payments to Dun & Bradstreet, you can opt to pay for Dun & Bradstreet’s credit packages. After verification, you’re then allowed to submit your payment details, which they add to your credit report.
Keep in mind that if they can verify the payment information, they won’t add it to your credit report.
4. Separate Personal and Business Credit
Let’s say you make personal purchases through your business account while making late payments. This report reflects on Dun & Bradstreet negatively affecting your Paydex score.
5. Start Small on Getting a Score
Even when your business isn’t using a lot of vendors and suppliers, you should still get your Paydex score. Making on-time payments helps you establish a Paydex score as you continue to expand the business. Accordingly, set realistic payment terms that’ll keep a tremendous Paydex score.
How long does it take to establish your Paydex score?
There’s no time limit to calculating the Paydex score, but you need to follow some steps to generate one. You must obtain a D-U-N-S number through Dun & Bradstreet. You’ll then need a minimum of 3 approved transactions from at least two suppliers.
6. Sign Up to Receive Score Alerts
Sign up for free to always receive alerts on your Paydex score change to keep track of your credit rating. Ensure you raise your disputes with Dun & Bradstreet when you notice any inconsistencies.
Make Your Paydex Score Your Priority
Paying your bills on time shows a positive PAYDEX score to vendors, suppliers, lenders, and potential partners. Therefore, apply to get a score and take the necessary steps to keep it up.
Maintaining a solid PAYDEX score builds your business reputation, helping you become even more successful.