What is a Paydex score? - Bankrate.com

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 more

Because 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 score

The 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 thoughts

If 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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