The Paydex score, produced by Dun & Bradstreet, is an important financial metric used to assess the creditworthiness of businesses. It’s the primary factor that lenders use when deciding whether or not to give businesses access to funds. The better the Paydex score, the higher your chances are of being approved for a loan or line of credit.
What Is A Paydex Score?
A Paydex score reflects how well businesses have demonstrated their ability to make payments on time throughout their payment history with vendors and lenders. It ranges from 0-100 with scores in the 80-90 range considered good and scores below 50 viewed as worrisome by potential creditors. The report also includes other useful information such as outstanding debt, amount of time companies have been in business, recent bankruptcies (if any), and more.
How Can New Businesses Get A Paydex Score?
Unfortunately, new businesses don’t always have enough data or relevant payment history which makes it difficult for them to get an accurate assessment from Dun & Bradstreet’s scoring system. However, there are still ways for new businesses to get a high rating even without existing accounts: registering your business with Dun & Bradstreet and establishing vendor accounts with members will help you build up a payment portfolio which can be used as evidence for payment performance over time; this can result in higher ratings for new businesses when compared to those without valid accounts. Additionally, taking advantage of programs like D&B Credit Builder can also help boost scores exponentially if consistently utilized correctly.
How Can I Improve My Score?
The best way to improve your paydex score is by making sure all invoices are paid on time without fail; even one late payment can negatively impact it significantly. Additionally, if there are any outstanding debts on file they should be addressed promptly before they become delinquent as this too can lead to lower scores while also adding additional costs due to interest charges or fees associated with late payments. Finally, taking advantage of business programs like D&B Credit Builder can help you establish and maintain solid repayment histories which can boost your paydex score exponentially over time if consistently utilized correctly.