PAYDEX® Score
PAYDEX® Score is a business credit score developed by Dun & Bradstreet that measures a company’s payment performance to suppliers and creditors, typically on a scale from 0 to 100. This is evaluated within Business Credit Scores.
Plain-Language Meaning
The PAYDEX® Score reflects how reliably a business pays its bills to vendors and suppliers, with higher scores indicating prompt or early payments and lower scores indicating late payments.
Practical Example
If you run a small business and consistently pay your suppliers before the due date, your PAYDEX® Score will likely be high, which can help you qualify for better trade credit terms from other vendors.
What It Does Not Mean
The PAYDEX® Score does not measure a business’s overall financial health, profitability, or creditworthiness with banks; it specifically tracks payment timeliness to trade creditors.
How the System Uses It
The system evaluates the PAYDEX® Score to assess a business’s payment habits, which suppliers and lenders may use to determine whether to extend trade credit or set favorable payment terms.
Common Misconceptions
- “A high PAYDEX® Score guarantees loan approval.” The score is one factor among many that lenders consider and does not guarantee approval.
- “PAYDEX® Scores are the same as personal credit scores.” PAYDEX® Scores apply only to business payment history and are separate from personal credit scores.
- “Only large companies have PAYDEX® Scores.” Any business with a Dun & Bradstreet file and sufficient payment history can have a PAYDEX® Score.
Related Pages
Related Glossary Terms
FAQ
- What is considered a good PAYDEX® Score? A PAYDEX® Score of 80 or above is generally considered good, indicating payments are made on time or earlier than agreed.
- How is the PAYDEX® Score calculated? The PAYDEX® Score is calculated based on payment experiences reported to Dun & Bradstreet, focusing on how quickly a business pays its bills compared to agreed terms.