Paydex Score: Everything You Need to Know

Paydex Score: Everything You Need to Know

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The Paydex score is a business credit score that Dun & Bradstreet assigns to a company. The score rates the likelihood that a business will make payments to suppliers or vendors on time. Unlike a personal credit score, which can go up to 850, the Paydex score ranges from 0 to 100, with higher values indicating a greater propensity to pay on time or sooner than the agreed upon terms.

A Paydex score of 80 or higher puts your business into the best risk group, meaning that your history of payments has demonstrated a low risk of late payment. Dun & Bradstreet is one of the major business credit reporting bureaus, alongside Equifax and Experian.

How the Paydex Score Is Used

In addition to Paydex scores, Dun & Bradstreet produces business credit reports, credit limit recommendations, delinquency predictor scores, failure scores and overall D&B scores for businesses.

Of all the scores Dun & Bradstreet provides, the Paydex score is most similar to an individual’s personal FICO rating. However, while your personal credit score is primarily used to measure the financial risk you present to lenders, the Paydex score is used in a few more ways. Like your personal credit rating, it can affect the premiums and interest rates your company pays for financing, such as loans or credit cards for small businesses. Better scores may help to lower any interest rates offered to your company when applying for these financial products.

One additional way that your Paydex score is used in a manner that generally would not apply to consumers is by vendors. Vendors often deliver goods and services, then invoice a business for payment afterwards. As a result, vendors have some financial risk of not getting paid. The Paydex score is one metric such suppliers can use to determine whether a new client or business partner might present possible risks going forward. Poor scores may make suppliers reluctant to do business or may limit the size and scope of services they are willing to agree to.

What Goes into Your Paydex Score

A company’s Paydex score is determined solely based on its history of trade references. Instead of looking at your history of financing and credit from financial institutions, Dun and Bradstreet uses the payment histories your company has had with the various vendors you may work with.

Dun & Bradstreet recommends providing at least four separate trade references in a company’s file in order to calculate a Paydex score. While trade references remain in your file for more than two years, Dun & Bradstreet only uses payment information from the past two years to calculate your score. Therefore, it’s in a company’s interest to have a consistent flow of positive trade experiences being reported. Unfortunately, credit card payments do not count as one of the trade experiences for these purposes.

Size of Credit and Timing Matter

The Paydex score and your overall D&B credit report are an attempt to measure your company’s current ability to make payments in a timely fashion. While all the references in the past two years are a factor in your score, the more recent trade experiences are more valuable and will have a higher relative impact on your company’s rating.

Another important piece to consider is the size of the credit lines: Payment histories on larger amounts will move your Paydex score more than those on smaller accounts. For example, paying a $10,000 bill late would have a larger negative impact than paying a $500 bill early would a positive one.

What's acceptable as a Trade Experience

One issue that businesses can face is finding enough vendors for the minimum needed to receive a score. Some vendors do not automatically report their transactions to D&B. Finding trade references can also be an issue for new businesses, as startups may need to initially pay with cash or personal credit when establishing relationships with vendors. Owners of these companies can look at using accountants or lawyers they’ve hired to use as trade references, as long as these relationships are billed through invoices with payment terms. You can also set up a business account with many major office supply stores, as they often automatically report trade accounts directly to Dun and Bradstreet.

Managing Your Payment Terms to Improve Your Score

Companies should remember that the Paydex score focuses on when you make your payments relative to the terms in your agreement with suppliers. By negotiating longer payment terms with your vendor, you can help increase the probability that your trade experiences reflect positively on your credit. For instance, a Net 10 trade agreement — meaning a bill would be due in 10 days — would give your company a much tighter window to make payments. If situations come up where cash is tight, your company may be more likely to be late and have a negative mark on its experience history. Having a longer window gives your business a better ability to pay on time or even early, which will positively affect your rating.

Getting Your Paydex Score

Your Paydex score appears on your Dun & Bradstreet credit report. But first, your business must be registered with Dun & Bradstreet and have a valid D-U-N-S number. While a D-U-N-S number may be assigned to each location of your company, your credit score should be assigned to the headquarters or top-level number. If your company has multiple offices that may deal with suppliers separately, you should still use the primary D-U-N-S number with vendors that may be reporting trade experiences for credit scoring purposes. The credit rating is meant to measure the organization's financial ability to pay, so it’s vital that the information is correctly attributed to the company as a whole.

What Different Paydex Score Values Mean

The following is a table that discusses what the different values of your Paydex score tell vendors about your payment history. Business owners should not be too concerned with having a "perfect score" of 100, since it would indicate that your company makes payments one month in advance of when they are due. (For most businesses, this is something highly unlikely and may not make the most sense from a cash flow perspective.) Instead, business owners should concentrate on maintaining at least a score of 80, which would indicate on-time payments to vendors or suppliers.


Average Days to Pay
Average Days to Pay


30 days sooner than terms5923 days beyond terms


29 days sooner than terms5824 days beyond terms


28 days sooner than terms5725 days beyond terms


27 days sooner than terms5626 days beyond terms


26 days sooner than terms5526 days beyond terms


25 days sooner than terms5427 days beyond terms


24 days sooner than terms5328 days beyond terms


23 days sooner than terms5229 days beyond terms


22 days sooner than terms5129 days beyond terms


21 days sooner than terms5030 days beyond terms


20 days sooner than terms4933 days beyond terms


18 days sooner than terms4836 days beyond terms
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