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How to Improve Your Paydex Score
How to Improve Your Paydex Score
Dun & Backstreet
D&B
D&B is the oldest and largest credit reporting agency.
Duns Number
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.
D&B’s System
This number gets a business into D&B’s system.
D&B Scores
D-U-N-S
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.
Payment Experiences
Three payment experiences should be enough to meet their requirement.
D&B Reports
- 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.
D&B Data
D&B
D&B continuously gathers data.
Accuracy Possible
It works to improve its analyses to assure the greatest degree of accuracy possible.
Financial Statements
To ensure a report as accurate as possible, give D&B your company’s current financial statements and eliminate any unknown pieces of information.
D&B Scores
- 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
PAYDEX Score
- 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.
PAYDEX Numbers
- 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
Useful Strategy
Addressing any problems head-on is a useful strategy.
Late With Payments
Hence, if your business is regularly late with payments, then you will need to address issues of organization and perhaps time management.
Accountant
You may need to hire an accountant or make a simple adjustment such as setting bill payment reminders in your phone.
Paydex Scores
Since PAYDEX Scores are dollar-weighted, you quite literally get more bang for your buck by paying your bigger bills first.
Reflects Trends
Because your PAYDEX Score reflects trends, you can help out your business by starting a practice of paying on time and sticking with it.
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
- PAYDEX
- 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
Visit: dnb.com/products/small-business/credit-monitor.html
- 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
Paydex Score
If errors are bringing your score down, then correctly those mistakes will raise your PAYDEX score.
Business Information
Get a Business Information Report from D&B at: dnb.com/products/small-business/business-information-report-snapshot.html
Update
Update the relevant information if there are mistakes or the information is incomplete.
D&B
At D&B, you can do this at: dn.com/duns-number/view-update-company-credit-file.html
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.
Recap
Business Information
D&B collects objective data points on businesses and creates Business Information Reports from them and other reports.
Comprehensive Report
The more information D&B has, the more comprehensive the report is.
Dispute Any Issues
It is in your best interest to monitor your D&B reports, and correct or dispute any issues you find.
