- Paydex scores are business credit scores that range from 1-100.
- Paydex scores were developed by data and analytics company Dun and Bradstreet.
- A good Paydex score starts at 80, with early payments earning a company higher scores.
Before anyone can take out credit — be it a loan to buy a car, a credit card, or a mortgage — potential creditors will check their credit score to see how likely they will pay off their debt on time. Higher credit scores qualify for the best rates.
When a business borrows money, its Paydex score serves a similar function, measuring its creditworthiness based on payment history. A vendor or lender can look at a business's Paydex score to help determine its risk before entering into a contract, approving a business loan, issuing a business credit card, or otherwise entering into a transaction with another company.
What is the Paydex score?
A Paydex score is a business credit score that "is used just like a personal credit score," says John J. Forrer, director of the Institute of Corporate Responsibility at George Washington University's School of Business. Data and analytics company Dun & Bradstreet (D&B) issues these scores to all businesses regardless of size.
Paydex scores are calculated based on how promptly a business pays off its debts. They help vendors, suppliers, and lenders mitigate risk when dealing with another company by showing how reliably it pays off its debts on time.
What is a good Paydex score?
A good Paydex score is 80 or above.
Paydex scores range from 1 to 100. According to the general manager of Third-Party Risk and Compliance at Dun & Bradstreet, Brian Alster, the higher the score, the more likely a business will pay its debts on time.
A Paydex score of 80 means a business will likely pay its bills on time. To score above 80, a company must pay its debts before their due dates. Anything below 80 indicates that a business has a history of late payments, Alster explains.
Paydex score range and interpretation
| Score range | Risk level | Payment time |
| 80-100 | Low risk | 0-30 days before due date |
| 50-79 | Medium risk | 2-30 days late |
| 0-49 | High risk | 31-120 days late |
The impact of Paydex scores on businesses
Paydex scores are primarily used in business-to-business decisions. Large corporations, mom-and-pop shops, and government agencies all use Paydex scores as one factor in assessing their risk of being paid late or not at all.
However, a bad Paydex score doesn't make a business untouchable, and a good Paydex score doesn't automatically secure a business deal. Alster explains that since Paydex scores are derived purely from historical information — a company's record of debt repayments — it's only a partial indicator of a business's future likelihood of repayment.
To help businesses make even better-informed decisions, Dun & Bradstreet issues other scores that can be used with Paydex scores. For example, the Delinquency Predictor and Financial Stress scores predict whether a company will cease operations within the next year and can help give a more thorough risk profile.
How are Paydex scores calculated?
Factors affecting a Paydex score
Dun & Bradstreet calculates a business's Paydex score using the last two years of a business's trade experiences, also known as payment experiences. Trade experiences are records detailing a business's dealings with "trade references," which are any suppliers or creditors who report their dealings with the company in question to Dun & Bradstreet.
While consumer credit scores use information from data furnishers, businesses can self-report their exchanges to Dun & Bradstreet, though this information must be verified. Dun & Bradstreet primarily collects data from sources of information such as creditors and vendors.
While not every business entity worldwide reports its data, Alster says that a "substantial" number of companies across all industries do so. That means there is a good chance that many, if not all, of the entities a business enters into transactions with regularly report data that Dun & Bradstreet factors into a Paydex score.
Although the list of companies that report data to Dun & Bradstreet is private, Alster says that commercial payments for anything from a small electric bill to a large business loan could be included.
How to check your Paydex score
Businesses can check their Paydex score by purchasing a subscription to Dun and Bradstreet's credit checker, CreditSignal. All companies should monitor their Paydex score.
How can a company establish a Paydex score?
To establish a Paydex score, you must obtain a D-U-N-S (Data Universal Numbering System) number for your business from Dun & Bradstreet. A D-U-N-S number is like a Social Security number for your business, allowing you to start building a business credit file. This process is free and can take up to 30 days, though you can expedite the process for $229.
Once you establish your D-U-N-S number, you generally don't need to take additional steps to trigger a Paydex score. Alster says that Dun & Bradstreet monitors government databases to capture when new businesses are formed and starts aggregating data for those businesses automatically.
That said, Dun & Bradstreet needs a minimum of three reported trade experiences from at least two trade references. The best way to start calculating a business's Paydex score is to "have trades" and make payments on time or early, Alster explains. You can do this by opening business credit cards and taking out business loans — as long as making payments on time is feasible.
Alster stresses that business owners should avoid using personal credit for their company because Paydex scores only include commercial transaction history. That means personal loans or using your personal credit card for business expenses won't contribute to your Paydex score, even if those transactions are made for legitimate business purposes.
How long does it take to get a Paydex score?
According to Alster, there isn't a standard time when a new business will receive its first Paydex score. He says that the more "capital intensive" a business is, the faster it will establish a Paydex Score.
That means that building a history of commercial debt and payments as soon as possible will help a business get a Paydex score faster. For example, some businesses receive a Paydex score before seeing their first client if they invest substantially in equipment and machinery or make payments on a business loan before opening.
Improving your Paydex score
The best way to improve your company's Paydex score is to pay your bills on time or early. A company can also ensure that vendors or suppliers are reporting to Dun & Bradstreet, open new trade lines to build a broader business credit history, and regularly review your D&B credit report to identify inaccuracies or issues that could affect your score.
Frequently asked questions about Paydex scores
A Paydex Score is a business credit score created by Dun & Bradstreet that indicates how well a business pays back its lenders. It ranges from 1 to 100, with a score of 80 indicating on-time payments.
A Paydex score is important for your business because a high Paydex score can help your business secure credit and funding as it grows. It is also important if you want to secure funding in your business name only, and it can lead to better financing and credit terms.
Yes, startups can have a PayDex Score. However, establishing a Paydex Score requires having a D-U-N-S Number and conducting transactions with creditors or suppliers that report to Dun & Bradstreet. Startups might need to build their credit profile over time to generate a score.
The main three business scores are Dun and Bradstreet, Experian, and Equifax. All three credit scores range from 1-100 and are similar to your consumer credit scores from TransUnion, Equifax, and Experian.
