Question: What is the D&B PAYDEX®?
Answer: The PAYDEX Score is a numeric indicator of how timely a company has paid its bills over the last 12 to 24 months. Other businesses might look at a PAYDEX Score for an indication of how likely a company is to pay its bills on time. The PAYDEX Score is performance based (rather than predictive) and cannot be calculated with fewer than three payment experiences on file. It ranges from 0 – 100, with higher scores indicating better payment performance. A score of 80 indicates that your business pays its obligations in a timely manner. The score is dollar weighted, meaning a $10,000 payment experience is weighted 10 times more than a $1,000 payment experience in your score calculation.
How is my D&B PAYDEX® Score calculated?
The PAYDEX Score is calculated by evaluating the terms of sale and the dollar amounts of each of the trade lines represented in your business credit file. The higher the dollar amount of the trade line reported, the greater the impact the payment experience can have on a PAYDEX Score.
If your company’s PAYDEX score has recently improved, it means based on information in the Dun & Bradstreet Data Cloud, Dun & Bradstreet has determined that your business is more likely to meet its financial obligations.
If your company’s PAYDEX score has recently declined, it means based on information in the Dun & Bradstreet Data Cloud, Dun & Bradstreet has determined that your business is less likely to pay its bills in a timely manner.
How can I help ensure that my D&B PAYDEX® Score accurately represents how my business meets its financial obligations?
You can help ensure your PAYDEX Score more accurately portrays how your business meets its financial obligations by confirming that relevant past payment experiences have been added to your business credit file. You can manually submit Trade References (companies you have done business with) for Dun & Bradstreet verification and acceptance* using CreditBuilder™. If your Trade Reference is approved, your payment experiences within the past 12 months with that company can be added to your file.
Some companies automatically report to Dun & Bradstreet, and your payment experiences with those businesses may also show in your report. Certain companies, including companies that report automatically to Dun & Bradstreet, are not eligible to be added manually as Trade References. See [add TR link] for more information on Trade References.
You can also encourage your suppliers and vendors to report payment experiences to Dun & Bradstreet. Payment experiences that go unreported cannot be considered when Dun & Bradstreet determines your company’s business credit scores and ratings. You should also make every effort to pay your bills on time, as your payment behavior is the sole factor influencing your PAYDEX Score.
* Trade References will be added subject to Dun & Bradstreet verification and acceptance. Please see http://www.dandb.com/glossary/trade-references/ for eligibility, process and other information regarding Trade References.
PAYDEX Score payment indications
- 3.0% of customers with a PAYDEX of 80 or above pay in a severely delinquent manner (91+ days past due on at least 10% of outstanding debt)
- 14.6% of customers with a PAYDEX of 70 through 79 pay in a severely delinquent manner
- 29.8% of customers with a PAYDEX of 60 through 69 pay in a severely delinquent manner
- 47.4% of customers with a PAYDEX of 50 through 59 pay in a severely delinquent manner
- 77.8% of customers with a PAYDEX of 1 through 49 pay in a severely delinquent manner