A Paydex Score is a Dun & Bradstreet number that is collected as part of a report on your business. This plays an important role in determining if and how other companies deal with yours. It’s a dollar-weighted average of how long it takes you to pay your bills. It also affects your ability to get a business credit card.
The score ranges up to a score of 100, with 90-100 being the best score range, indicating that you pay your bills early. A score of 80 indicates that your invoices are generally paid on time. Any value in the 70s or below indicates that your company is frequently late in paying its invoices. Please note that this is an average of all your transactions that are reported to D&B.
For example, if you are late on one bill but pay another bill early, your score might average around 80, if both bills were for equal amounts. If you pay a large bill late and a small bill early, your score will go up, but not as much as in the example above.
Raise your Paydex Score
Conversely, paying a small bill late and a large bill early will cause your Paydex score to increase more. The best way to increase this score is to frequently pay all your bills early, if possible.
This score clearly has a significant impact on your overall credit image to potential business loan lenders, business credit card companies, and other businesses you may be working with. The reason for this is that it is an indicator of how your company pays its bills.
A business with a low score, on average, typically falls behind on its invoices and is less likely to be approved for a loan or other credit-based arrangement. On the other hand, a company with a high score pays most of its bills on time, or even sooner, which is an obvious advantage to anyone looking to do business with you or give you a loan.
Using a Paydex score to get a business credit card
Basically, a higher score indicates that your business is very trustworthy and indicates lower risk in extending, for example, a line of credit, lease, or business credit card, giving you a better chance of getting those and others. financial arrangements when your business needs them.