The main credit score used in the business world is known as a Paydex score provided by Dun and Bradstreet.This number assess a business’s lending risk much the same as a consumer credit score reflects a consumer’s individual credit risk. Paydex is essentially the business equivalent of your personal credit score.
The exact definition from Dunn & Bradstreet, or D&B is: 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.
There are many BIG differences from a business Paydex credit score and an individual FICO consumer credit score.
Consumer FICO credit scores range from 350-850. The Paydex Score ranges from 0-100 with 100 being the highest score you can obtain.
Individual credit scores are calculated based on a number of factors.
The Paydex score is calculated based on only one single factor; whether a business makes prompt payments to its suppliers and creditors within the agreed upon terms of payment.
Most lenders and suppliers are looking for a score of 70 and higher. Having a score of 80 and above is very good.
Here is a breakdown of how the Paydex credit score is calculated:
Expect payment may come early 100
Payments generally come within early payment discount period 90
Payment is prompt 80
Payment comes 14 days beyond terms 70
Payment comes 21 days beyond terms 60
Payment comes 30 days beyond terms 50