What Is a PAYDEX® Score and How Can It Impact Your Business?
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The PAYDEX® Score is a business credit score developed by Dun & Bradstreet. Lenders, vendors, investors, and others may check your company’s PAYDEX Score to evaluate risk and decide whether they wish to work with you.
Your business’s PAYDEX Score could impact whether your business can obtain financing, attract investors, and more. As a result, it’s important to understand how this business credit scoring model works, and how to build good business credit for your company.
What Is the PAYDEX Score and How Is It Used?
A PAYDEX Score is a popular business credit score. Lenders and other companies can use your PAYDEX Score to predict how likely your company is to pay its debts on time.
The PAYDEX Score ranges from 1 to 100. Lower scores indicate that your business is less likely to pay on time. Higher scores signal the opposite.
Dun & Bradstreet, or D&B, is the company behind the development of the PAYDEX Score. The business credit reporting agency also maintains commercial credit reports on over 300 million businesses around the globe.
How the PAYDEX Score Is Calculated
When you establish a new business, one of the first steps you should take (among others) is to file for a DUNS number. A DUNS number is a nine-digit identification number that D&B uses to link your business to its D&B credit file.
After you receive a free DUNS number, you can start to establish credit in your company’s name with D&B. But in order to qualify for a PAYDEX Score, your D&B business credit report must meet the following minimum score criteria.
- At least two suppliers are reporting a tradeline on your business to D&B.
- Your D&B credit report file contains at least three trade experiences (e.g., payment records, etc.).
Once your business satisfies the criteria above, the way it pays its bills (aka early, on time, or late) helps determine the PAYDEX Score your company earns. The scoring model is also dollar-weighted. High-dollar payment experiences have a bigger impact than smaller ones.
For the sake of example, let’s assume that your D&B business credit report shows the following three accounts.
High Credit Example
| Trade Payment | Largest High Credit |
| ABC Supplier | $100,000 |
| ABC Business Services | $8,000 |
| ABC Bank | $5,000 |
In the scenario above, the way your business managed payments on its largest supplier account could count for more than how it managed the two smaller debts. That means it’s especially important to pay your large business debts on time or early.
What Is a Good PAYDEX Score?
PAYDEX Scores range from 1 to 100. As with most credit scores, the higher the number your business can earn on the PAYDEX Score scale, the better.
The chart below outlines what score your company might earn based on its payment history.
Payment Impact on PAYDEX Score
| PAYDEX Score: | Payment comes: |
| 100 | 30 days before due date |
| 90 | 20 days before due date |
| 80 | On the due date |
| 70 | 15 days after due date |
| 60 | 22 days after due date |
| 50 | 30 days after due date |
| 40 | 60 days after due date |
| 30 | 90 days after due date |
| 20 | 120 days after due date |
| 1-19 | More than 120 days after due date |
Source: CreditStrong
Many companies consider a PAYDEX Score of 80 to be good. However, you may want to research a specific lender or vendor’s business credit score requirements for more information.
In the meantime, here’s a general look at what lenders and vendors might think of your business’ risk level based on its PAYDEX Score.
- Low Risk: 80-100
- Medium Risk: 50-79
- High Risk: 0-49
How to Access Your PAYDEX Score
As a small business owner, it’s important to check not only your personal credit reports and scores, but your business credit information too. The process and cost of checking your consumer and business credit scores, however, can differ in several ways.
There’s no federal law that requires business credit reporting agencies like Dun & Bradstreet to give you free copies of your business credit reports. And although it’s easy to access your personal FICO Score or VantageScore credit score online, business scores are different.
Free corporate credit scores do exist. For example, CreditStrong Business Credit Builder Accounts include free monthly access to your Equifax Business Delinquency Financial Grade Score. But if you want a copy of your PAYDEX Score, you might have to pay for it.
Dun & Bradstreet does offer free one-time access to your PAYDEX Score (and others) for 14 days. Beyond the initial free trial, you can subscribe to the business credit bureau’s CreditSignal® Plus plan for $15 per month to maintain credit score access.
How to Improve Your PAYDEX Score
A good PAYDEX Score can be a tremendous asset for your business. When your company’s credit scores indicate that it’s a good credit risk, you may find it easier to qualify for financing like a small business loan, business credit card, and more.
This ability to access affordable business financing matters. Without sufficient business funding, over 25% of businesses fail to grow.
Earning a good PAYDEX Score takes time. So if your business doesn’t yet have a PAYDEX Score, or you’re looking to improve the score it has, the tips below may help.
1. Open More Tradelines
Your business needs at least three trade experiences on its D&B credit file to earn a PAYDEX Score. But having more trade experiences—especially on-time or early payments—might be beneficial as well.
When you search for accounts to help your business establish credit, search for vendors or lenders that report to D&B. Otherwise, those accounts won’t help you build your PAYDEX Score (even if you manage them well).
2. Pay Early
It’s critical to avoid making late payments to your business’ creditors. Not only could a late payment damage your business credit scores, it could cost your business money in fees as well.
If you want to earn a good or excellent PAYDEX Score, on-time payments might not be enough. Before your business can achieve an excellent PAYDEX Score, your company must make a habit of paying credit obligations early—ideally a full 30 days before payment is due.
3. Fix Errors
Credit reporting agencies like D&B work hard to maintain accurate information on the credit reports they compile. Yet despite those efforts, mistakes can still happen.
Therefore, it’s important to review your business credit reports often to ensure they are accurate. Errors on your company’s D&B credit report could result in an unfair drop in your PAYDEX Score. And a low PAYDEX Score could hurt you whether it’s your fault or not.
If you find errors on your business’ D&B credit report, you’ll want to contact the credit bureau to dispute them. When you file a dispute, D&B will investigate your claim and must delete the invalid payment experience from your business credit report if they cannot verify its accuracy.
FAQs
Is a PAYDEX Score of 80 Good?
Many vendors, suppliers, and lenders consider a positive PAYDEX credit score of 80 to be a good business credit score. A numerical score of 80 indicates that your business pays its credit obligations on time and represents a low credit risk to future lenders and creditors.
How Long Does It Take To Establish a PAYDEX Score?
Dun & Bradstreet doesn’t set a minimum time limit on how long it takes a business to be eligible for a PAYDEX Score. Instead, the minimum scoring criteria rules state that your business needs at least two tradelines reported to D&B with three or more trade experiences.
D&B does note that trade experiences that only contain information about the first sale on an account don’t count for PAYDEX Score calculations. So, you’ll need to have at least some payment activity on an account before it can help you establish a PAYDEX Score.
What Are the Other Business Credit Scores?
Your business can have more than one credit score. Some of the other business credit scores your company might be able to earn are as follows.
- PayNet MasterScore
- D&B Failure Score (formerly known as the Financial Stress Score)
- Equifax Business Delinquency Financial Score
- Intelliscore Plus (by Experian)
- FICO Small Business Scoring Service Score (FICO SBSS Score)
The trick to establishing multiple business credit scores is to open accounts with companies that report to multiple business credit bureaus. This guide can help you discover 12 companies that help build business credit.
It’s also important to understand that not all business credit scores are calculated the same way. For example, the PAYDEX Score doesn’t consider credit utilization on business credit cards in its scoring calculations. Other business credit scoring models, however, may do so.
Once your business is eligible for a business credit score, it’s a good idea to learn more about how it works. As you understand the basics, you can work to develop good business credit management habits that may benefit you no matter which credit scoring model a lender uses.
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