Paydex Score: Dun & Bradstreet
The main credit score used in the business world is the PAYDEX score from Dun and Bradstreet. This number assesses a business’s lending risk. It is much the same as a consumer credit score reflects a consumer’s individual credit risk. PAYDEX is more or less the business equivalent of your personal credit score.
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.
Differences Between Personal And Business Credit
Many BIG differences exist between 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.
Individual credit scores come from several factors.
The PAYDEX score comes from one single factor: If a business makes prompt payments to its suppliers and creditors within the agreed-upon payment terms. Most lenders and suppliers are looking for a score of 70 and higher. A score of 80 or better is excellent. If you own a business, your PAYDEX score is essential in establishing new credit and continuing to build credit limits exceeding $100,000.
How Long Does It Take To Start Building Business Credit?
It only takes 60 days to establish a positive PAYDEX credit score. First, apply for a DUNS Number. This is a nine-digit business identifying number with Dun and Bradstreet. Once your DUNS number is established, you should next find a merchant who will extend you credit and then report that credit to Dun and Bradstreet.
Once you have a positive business credit report to Dun and Bradstreet, you will have a positive PAYDEX score established. Then, apply for more business credit and use it often. Pay back early to raise your scores to 80 or higher.
Knowing the proper steps to take lets you easily and quickly establish a positive PAYDEX credit score. Your scores will continue to rise as you pay your bills on time. This makes it possible to qualify for credit against your business EIN.
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