What is a Paydex score?

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If you own a business, you may have heard of something called a Paydex score. But what is a Paydex score, and why does it matter for your business? If you want to get financing from a financial institution or plan on working with vendors and service providers, a Paydex score is a crucial piece of the puzzle. It indicates your financial health and is a good indicator of your reliability.What is a Paydex score?A Paydex score is a business credit score, similar to your own personal credit score. It is issued by Dun and Bradstreet and represents how likely it is that your business will pay vendors and suppliers on time. While your personal credit score ranges from 0 to 850, your Paydex score is between 0 to 100.A higher Paydex score indicates you are more likely to pay bills on time or even in advance. If your score is above 80, it means that, based on your payment history, you are considered to be low risk.What factors impact your Paydex score?Unlike your personal credit score, which is based on a variety of factors, your business Paydex score is dependent solely on your Trade References.Trade References are your payment experiences with vendors and suppliers and are registered with Dun and Bradstreet by the vendors and suppliers themselves. It’s important to note that Dun and Bradstreet does not consider credit card payments to be Trade References.To properly calculate your Paydex score, Dun and Bradstreet recommends you have a minimum of four Trade References on record. Only transactions from the previous two years are used when determining your business score.Recent, larger credit matters moreBecause the Paydex score reflects the current likelihood of your business making payments on time, recent Trade References carry more weight than older ones.Additionally, the size of payments made or owed to vendors and suppliers is an important factor, as well, with larger payments having a larger impact than smaller ones. Being late on a $5,000 payment will have a much greater effect on your Paydex score than being late on a $300 payment.Improving your Paydex scoreThe primary way to improve your score is to make payments in a timely manner. Negotiating longer terms with vendors and suppliers can be very helpful, as it makes it easier for you to make payments on time or early. For example, if you only have a 10-day window to make a payment, you may have issues if finances get tight, resulting in a late payment and a negative experience on your record.How is Paydex score used?The Paydex score is used by a variety of people and organizations to help them decide whether they want to work with your business. Financial institutions will use your score to determine whether to lend you money and what terms to give you.Insurance companies examine your score when deciding premium amounts for your business. Landlords may check your score when deciding whether to accept you as a tenant. And, of course, suppliers and vendors will look at your score before agreeing to engage with your business.With these things in mind, it is in the best interest of your business to keep your Paydex score as high as possible. A low score can hamper your growth and make it difficult for you to do business.What do different Paydex scores mean?The following table shows you what each Paydex score means in terms of your payment history. Keep in mind, you don’t need to have an absolutely flawless score. That would mean you pay all your bills 30 days in advance, which few if any businesses can actually do. As long as you keep your score at 80 or above, it shows vendors and suppliers that you pay your bills on time.

Paydex Score
Average days to make payment
Paydex score
Average days to make payment

100
30 days early
59
23 days late

99
29 days early
58
24 days late

98
28 days early
57
25 days late

97
27 days early
56
26 days late

96
26 days early
55
26 days late

95
25 days early
54
27 days late

94
24 days early
53
28 days late

93
23 days early
52
29 days late

92
22 days early
51
29 days late

91
21 days early
50
30 days late

90
20 days early
49
33 days late

89
18 days early
48
36 days late

88
16 days early
47
39 days late

87
14 days early
46
42 days late

86
12 days early
45
45 days late

85
10 days early
44
48 days late

84
8 days early
43
51 days late

83
6 days early
42
54 days late

82
4 days early
41
57 days late

81
2 days early
40
60 days late

80
Pays on time
39
63 days late

79
2 days late
38
66 days late

78
3 days late
37
69 days late

77
5 days late
36
72 days late

76
6 days late
35
75 days late

75
8 days late
34
78 days late

74
9 days late
33
81 days late

73
11 days late
32
84 days late

72
12 days late
31
87 days late

71
14 days late
30
90 days late

70
15 days late
29
93 days late

69
16 days late
28
96 days late

68
17 days late
27
99 days late

67
18 days late
26
102 days late

66
19 days late
25
105 days late

65
19 days late
24
108 days late

64
19 days late
23
111 days late

63
20 days late
22
114 days late

62
21 days late
21
117 days late

61
22 days late
20
120 days late

60
22 days late
1 – 19
Over 120 days late

Final thoughtsIf you want to run a successful business, you need to keep tabs on your Paydex score. It influences everything from securing financing to obtaining supplies to insurance rates. The good news is that if your business credit score is lower than you’d like, you can work to raise it. Making payments on time or early will move the needle in the right direction.

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