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Dun & Bradstreet Credit Scores

Credit Suite - Thursday, September 01, 2016

D&B offers sales and marketing products such as the DUNS Market Identifier Database, Optimizer, and D&B Professional Contacts, all of which provide sales and marketing professionals with business data for both prospecting and CRM activity.

The main credit score used in the business world is known as a Paydex score, provided by Dun & Bradstreet. From D&B… “The D&B PAYDEX® Score is D&B’s unique dollar-weighted numerical indicator of how a firm paid its bills over the past year, based on trade experiences reported to D&B by various vendors”. The Paydex score ranges from 0-100, with 100 being the best score a business can obtain. A score of 80 or higher is considered “good” or healthy credit. A business can obtain a good business Paydex credit score by ensuring payments are made promptly to suppliers and vendors.

Personal credit scores take time to build as they are based on five factors which are:

Payment History accounts for 35% of the score, Utilization Accounts for 30% of the score, length of Credit History accounts for 15% of the score, accumulation of New Credit accounts for 10% of the score and Credit Mix accounts for 10% of the score.

Business credit scores are based only on whether the business pays its bills on time, a 100 indicates payments may come early, 90 indicates payments is prompt, 80 indicates payments comes within an early discount period and 70 indicates payments come 14 days beyond terms. While 60 indicates payments come 21 days beyond terms, 50 indicates payments come 30 days beyond terms, 40 indicates payments come 60 days beyond terms and 30 indicates payments come 90 days beyond terms. Then 20 indicates payments come 120 days beyond terms and UN indicates payment data is unavailable.              

A business will need a PAYDEX score of 80 to obtain the most favorable financing. This score simply reflects the business pay all bills on time. To obtain a PAYDEX score, a business will need at least five trade accounts reporting to their file.

It can take as long as 90 days for those trades to report and a score to be established. The business credit score itself is calculated by using as many as 875 payments.          

It is important for a business owner to have accounts report favorable payment history. If bills are paid on time, the business credit score will be positive but if payments are made late, the

PAYDEX business credit score will drop. The PAYDEX score will adjust according to how early or late the bills are paid.

D&B offers another risk score known as the Supplier Evaluation Risk Rating. This rating predicts the likelihood that a company will file for bankruptcy and cease operations within the next 12 months. This score ranges from 1-9, with 1 being the lowest risk and 9 being the highest.

D&B’s Supplier Stability Indicator predicts the likelihood that a supplier will encounter a large and significant financial or operational stress over the next 90 days. This score ranges from 0-10 with 0 being the lowest risk and 10 the highest.

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Articles and Information for your Credit Journey
Articles and Information for your Credit Journey
Articles and Information for your Credit Journey
Articles and Information for your Credit Journey
Articles and Information for your Credit Journey
Articles and Information for your Credit Journey
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Articles and Information for your Credit Journey
Articles and Information for your Credit Journey
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