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What is the Financial Stress Score and how do I impact it?

Question: What is the Financial Stress Score?

Answer: The Financial Stress Score (FSS) predicts the likelihood that a business will experience financial distress over the next 12 months, such as filing for bankruptcy. The FSS is comprised of a company's: business history, payment habits, and industry norms. Scores range from 1 (Low Risk) to 5 (High Likelihood).

A business that is financially stressed has:

  1.     Ceased operations following assignment or bankruptcy
  2.     Ceased operations with loss to creditors
  3.     Voluntarily withdrew from business operation leaving unpaid obligations
  4.     Is in receivership, reorganization, or has made an arrangement for the benefit of creditors

Note: Voluntary discontinuance involving no loss to creditors is not defined as financial stress.

For more information on how to impact your Financial Stress Score, please visit our FAQ on impacting the Financial Stress Score.

 Financial Stress Risk Class    Financial Stress Score    Financial Stress Percentile  Probability of Failure
 1  1570-1875  95-100  0.03%
 2  1510-1569  69-94  0.09%
 3  1450-1509  34-68  0.24%
 4  1340-1449  2-33  0.84%
 5  1001-1339  1  4.70%

You can impact your Financial Stress Score by addressing those areas of your business that most influence the score. Since the Financial Stress Score is weighted by business and industry demographics, payment history, and financial statements respectively, the below steps can be taken to improve the way each of these factors affect your score:

  1. Review your D&B report and make sure it is complete and up to date with the most current and accurate information, including your payment history and public filings. For more information on updating your report, please visit our Company Update FAQ.
  2. Make every effort to pay your bills on time - your payment behavior is a prime factor influencing your Commercial Credit Score. For more information on impacting your D&B PAYDEX score, please visit our PAYDEX FAQ.
  3. Submit positive financial statements to D&B for review. To learn how to submit financial statements, please visit our Company Update FAQ.

Furthermore, adding additional payment experiences to your D&B credit file with our CreditBuilder service can supplement the above steps by helping to strengthen your PAYDEX score, which is a contributing factor in calculating your Financial Stress Score. For more information on submitting trade references, please see our Trade References FAQ. If you have questions regarding the Financial Stress Score, you can contact one of our Credit Advisors by clicking on the "Submit a Request" tab from the menu bar above and filling out a request form.

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