How to Improve Your Paydex Score
How to Improve Your Paydex Score
Dun & Backstreet
D&B is the oldest and largest credit reporting agency.
You will always need a DUNS number to start building business credit.
Get One Free
If you don’t have a DUNS number, you can get one free at www.creditsuite.com/duns or dnb.com/duns-number/get-a-duns.html.
It’s not enough to just have a D-U-N-S number if you want a score from D&B, you also need payment experiences.
Reports To D&B
A payment experience is just a reported purchase from a business which reports to D&B.
Three payment experiences should be enough to meet their requirement.
- D&B offers database-generated reports.
- The idea is to help their clients decide whether a business is a good credit risk.
- Companies use the reports to make informed business credit decisions and avoid bad debt.
- Several factors enter into creating such a report.
- In general, when D&B does not have all the data they need, they will indicate as much in their reports, but missing data does not necessarily mean a company is a poor credit risk. Instead, the risk is unknown.
- Unknowns tend to make lenders nervous.
- PAYDEX is probably the best-known D&B score
- Some others include: D&B rating, Delinquency Predictor, Financial Stress Score, and Supplier Evaluation Risk Rating.
- For a sample Business Information Report, visit products.dandb.com/download/2019BIR-Snapshot-Report.pdf
- This is D&B’s dollar-weighted numerical rating of how a company has paid its bills over the past year.
- D&B bases this score on trade experiences reported by various vendors.
- The score ranges from 1 to 100.
Higher scores mean a better payment performance.
- PAYDEX scores reflect how well a company pays its bills.
- D&B has created risk categories to make it easier to translate a PAYDEX Score into understandable risk groups:
- PAYDEX 80-100: Low risk of late payment
- PAYDEX 50-79: Moderate risk of late payment
- PAYDEX 0-49: High risk of late payment
- Based on changes to your PAYDEX, D&B takes a proactive approach to notify you when a change in your score is bringing you closer to a different risk category.
D&B Uses LexisNexis
- Every home you’ve ever owned, values, sale prices
- Building materials for your home, HOA info, beds, baths, roofing, AC Units
- Deeds, mortgages, title companies, interest rates, loan amounts, terms, loan types
- Every phone number and email you’ve ever had
- All licenses, firearms, mortgages, and violations
- Traffic tickets, felonies, misdemeanors, sex offender records
- Name variations
- Marriage and divorce records
- Every vehicle owned including VIN
- Every insurance policy you’ve ever had
- Every business you’ve been associated with
- Family info including children
- Loans and leases
- Aircraft and boat owner records
- Public records including bankruptcies, judgements, lawsuits, liens
- Education information including degrees, schools, dates attended and graduated
- Military records
- Online marketing records
- Short-term credit offer request records
Improving Your PAYDEX Score
Late With Payments
D&B Business Information Reports
- For a snapshot of your business’s financial health, the best report to get is probably a Business Information Report.
- Currently, it costs $139.99.
- You can get a Business Information Report on your own business or a company you’re considering doing business with.
- In addition to a PAYDEX Score, a D&B Business Information Report contains:
- Trade payments (summary and by industry)
- Trade line specifics with dollar amounts and terms
- Legal events
- Company events (mainly concerning ownership and management)
- A company family tree showing ownership specifics
- A Business Information Report also contains a Risk Assessment Summary.
- This summary shows:
- Maximum credit recommendation
- Delinquency Predictor percentile
- Financial Stress percentile
- Supplier Evaluation risk
Monitoring Your D&B Credit Scores and Reports
- Business credit reports are not always perfectly correct.
- All of the major CRAs, including D&B, are committed to accuracy.
- But you won’t know there are errors unless you monitor your business credit reports.
- For D&B only, you can monitor your reports via CreditMonitor
- It currently cost $39 a month
- The costs of monitoring can add up fast.
- At Experian, your best bet would be a Business Credit Advantage Subscription Plan.
- It currently costs $189 per year.
- Visit: sbcr.experian.com/pdp.aspx?pg=Sample&link
- At Equifax, you would use Equifax Complete.
- It currently costs $19.95 per month after an offer of 30 days for $4.95.
- Visit: equifax.com/equifax-complete/Equifax
- Add these all together for the year and it’s $468 for D&B, $189 for Experian, and $224.40 for Equifax for a grand total of $881.40.
- You can monitor your business credit at D&, Equifax, and Experian through Credit Suite for considerable savings over what it would cost you at those CRAs all in one place.
- Credit Suite offers monitoring through the Business Finance Suite.
- See what credit issuers and lenders see so you can directly improve your scores and get the business credit and funding you need.
- Visit: creditsuite.com/monitoring.
Correcting Your D&B Credit Scores and Reports
If errors are bringing your score down, then correctly those mistakes will raise your PAYDEX score.
Disputing Issues With Your D&B Credit Scores and Reports
- D&B won’t change your scores without proof.
- Disputing credit report errors normally means you mail a paper letter
- Include duplicates of any proofs of payment with it.
- These are documents like receipts and cancelled checks.
- Never mail the originals, always send copies and keep the original copies.
- Fixing credit report errors also means you specifically spell out any charges you challenge.
- Make sure your dispute is as crystal clear as possible
- If you need to mail anything in, then use certified mail so that you will have proof that you sent in your dispute.
- Be specific about the concerns with your report
- D&B wants you to go through D&B Customer Service to add payment experiences.
- D&B’s Customer Service contact number can be found at dandb.com/glossary/paydex.
Dispute Any Issues
It is in your best interest to monitor your D&B reports, and correct or dispute any issues you find.