What is paydex?

 

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.  

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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.