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What is paydex?

by Altaf

Summary: establishing a Paydex score and maintain a good one is important for a business or a company. As, it holds the trust of potential partners, lenders, suppliers, and vendors in your business. A solid PAYDEX score can help you build your company’s reputation. But, do you know what is paydex? And why it is necessary? Let us know paydex and its importance for the companies as well as for the lenders, suppliers, and vendors in your business.

What is paydex?

A paydex is basically a score that is assigned by a company known as Dun & Bradstreet or d&b company to other companies. This d&b paydex tells us about the rating of the company and whether the company will be able to pay its suppliers or vendors on time.

Therefore, paydex is a business credit score having a range of 0 to 100. A higher score tells us higher the reliability to pay off the amount to suppliers or vendors. So, the Lenders and vendors use the business paydex score to know the details related to loan eligibility, interest rates, and repayment terms.

Although, paydex score is much similar to the FICO credit score, where consumer credit is traced down.

How Is the PAYDEX Score Used?

Small business lenders, suppliers, and vendors use the paydex score to know your trustworthiness of repaying your debts. Even if you want to open up a business, or doing business with a business partner may also look up to your PAYDEX Score to determine your reliability and worthiness. So, maintaining a higher score means that you are a lower risk borrower and this gives you a preference over the other lower score holder than yours.

How to improve the D&B PAYDEX score?

In order to improve your dun and Bradstreet paydex score, you should try to pay your debts as sooner as you can as this score is entirely based on your payments to vendors and suppliers. And to maintain a perfect score of 100 you need to pay early as a pay dex score of 80 can also be scored by making payments on time.

And for having a paydex score you should firstly have at least three open trade lines. Otherwise, it will be considered that you don’t have a paydex score at all. And having no paydex score is also a bad sign, just like having a low paydex score.

How to calculate the PAYDEX score?

Dun & Bradstreet collects all the trade and credit related information from the vendors and suppliers for a period of 12 months, which is analysed to create a score. There are many companies that report to paydex, where the promptness of your payments is noted down to create the paydex company score.

Here, a different paydex score depicts your consistency in making payments to the supplier.

Meaning of different Paydex scores:

The table shown below depicts your paydex score in terms of your payment history. This table tells us that if you pay all your bills within a period of 30 days in advance then you maintain a good paydex score of 100, likewise, you delay your payment advance days your paydex score decreases. Try to maintain a score of 80 where the vendor and supplier consider it as a good option.  

Paydex ScoreUsual days to make paymentPaydex scoreUsual days to make payment
10030 days early5923 days late
9929 days early5824 days late
9828 days early5725 days late
9727 days early5626 days late
9626 days early5526 days late
9525 days early5427 days late
9424 days early5328 days late
9323 days early5229 days late
9222 days early5329 days late
9121 days early5430 days late
9020 days early4933 days late
8918 days early4836 days late
8816 days early4739 days late
8714 days early4642 days late
8612 days early4545 days late
8510 days early4448 days late
848 days early4351 days late
836 days early4254 days late
824 days early4157 days late
812 days early4060 days late
80Pays on time3963 days late
792 days late3866 days late
783 days late3769 days late
775 days late3672 days late
766 days late3575 days late
758 days late3478 days late
749 days late3381 days late
7311 days late3284 days late
7212 days late3187 days late
7114 days late3090 days late
7015 days late2993 days late
6916 days late2896 days late
6817 days late2799 days late
6718 days late26102 days late
6619 days late25105 days late
6519 days late24108 days late
6419 days late23111 days late
6320 days late22114 days late
6221 days late21117 days late
6122 days late20120 days late
6022 days late19Over 120 days late

How to Check Your PAYDEX Score?

By purchasing a business credit report from Dun & Bradstreet, you can check paydex score where you will receive an update from the company which will depict the changes in your score. Where a copy of your credit report can also be purchased by the Lenders, suppliers, vendors, competitors, and potential business partners to know your score. Thus, to check paydex score you need to purchase the report of D & B company.

What Is a Good PAYDEX Score?

A high score is considered as a good paydex score which signifies a low-risk business that is covered in the range of 8 to 100. So, a score between 80 to 100 is considered as a good paydex score.

Frequently Asked Questions related to what is paydex:

  • How do you get a paydex score?

By paying your debts and payments on time you can get a paydex score further you should also hold at least 3 credit experiences or open trade lines to hold a paydex score, otherwise, it will be considered as you do not have any paydex score.

  • What is considered a good paydex score?

A high score is considered as a good paydex score which signifies a low-risk business that is covered in the range of 8 to 100. So, a score between 80 to 100 is considered as a good paydex score.

  • What is paydex declined?

Paydex declined means that there’s a greater risk associated and the company will fail to pay off its debts, which is based on the information collected by Dun & Bradstreet.

  • How many payment experiences make up a paydex score?

You need at least 3 credit experiences or open trade lines.

Conclusion:

Always focus on maintaining a good paydex score to increases the trust of others such as potential partners, lenders, suppliers, and vendors in your business. A solid PAYDEX score can help you build your company’s reputation. Thus, by now you know what is paydex and its importance for lenders, suppliers, and vendors.

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