Building Business Credit: What is a Paydex Score?

Published: 14th October 2011
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Paydex is a system developed by Dun and Bradstreet (D&B) - the leading credit reporting agency in the US. The Paydex Score is used to calculate a businessís credit history in terms of figures. Paydex system is only applicable for business entities. Having a good Paydex score, which is the result of business credit reporting, is essential to continued business growth even if your company does not want to obtain credit cards. This will help you determine your credit repair measures.

This score is utilized in a number of different ways.
1. The lender will look at your business's Paydex score before they make a lending decision.
2. Insurance companies will evaluate this score when they are calculating your premiums.
3. Equipment companies will check this score before they lease equipment to you.
4. Landlord will view this score whenever they are deciding whether they want to lease a building to you.
This scoring system ranges from 0 to 100, with 90-100 considered as an excellent rating. A score of 80 and above is considered as good while a score of 70 and below indicates bad credit.

How to Raise Your Paydex Score

The timeliness of your payment plays a big role in building your
business credit . Of course, the best way to achieve an outstanding score is to always submit your payments on time. If you can pay your bills earlier than your due date, then the better it would be for your business credit. late payment can pull down your score by a point or two. Thus, as much as possible, it is crucial to be on time in submitting your payments to all your creditors. Your credit types also have a great affect on your paydex score.

Obviously, a higher Paydex score would give a business the advantage of qualifying for loans or accounts that require excellent credit. Banks, lending companies, suppliers, merchants and investors all rely heavily on your business credit history when it comes to closing deals. high Paydex Score makes you an ideal client for banks and lenders while a low score makes you a high-risk borrower in the eyes of creditors. It is interesting to note that the best business credit cards in the market always require good to excellent credit.

Pay your bills on time and keep a check on your credit card transactions so that you can resort to credit repair to improve your business credit profile.

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