What is a PAYDEX® score, and how does it work?

A PAYDEX score is a business credit score issued by Dun & Bradstreet (D&B) that measures how reliably a company pays its bills. Scores range from 1 to 100, with 80 considered a good score, meaning your business consistently pays on time.

If you’re a business owner, your PAYDEX score can be an indicator of your business’s creditworthiness and payment habits. Learn more about PAYDEX scores, including who uses them, how they’re calculated and how to improve them.

What you’ll learn:

• A PAYDEX score is a business credit score issued by D&B that reflects how consistently a business pays its bills on time to lenders, suppliers and vendors.
• Your PAYDEX score may affect your business’s insurance premiums and ability to qualify for business loans or property leases, as well as influence whether suppliers, vendors and potential partners want to do business with you.
• PAYDEX scores range from 1 to 100, with scores over 80 indicating payments are typically made early. 
• You may be able to improve your PAYDEX score by avoiding late payments and confirming that your suppliers, vendors and lenders are reporting your payments to business credit bureaus.

A PAYDEX score is a type of business credit score issued by D&B. Just as your personal credit score demonstrates your creditworthiness and how likely you are to repay your debts, your PAYDEX score reflects how consistently your business makes timely payments to suppliers, lenders and vendors.

PAYDEX scores range from 1 to 100. Higher scores can suggest your business consistently makes on-time or early payments.

To get a D&B PAYDEX score, you’ll first need to apply for a D-U-N-S® number. To accurately calculate a PAYDEX score for your business, D&B needs to have at least two different trade references reporting payment experiences. These are payment events reported by vendors or suppliers when your business pays an invoice.

To look up your PAYDEX score, D&B has several tiers of business credit-monitoring tools that you can use to track your scores and receive alerts and insights. These include both free and paid solutions for different levels of monitoring and support.

If you’re considering partnering with another business, you can also check its PAYDEX score by purchasing its business credit report through one of D&B’s business credit products.

Typically, lenders, vendors and partners may check your business’s PAYDEX score to assess its creditworthiness and payment reliability when deciding whether to work with you. For example:

• Suppliers and vendors: Your PAYDEX score may influence whether suppliers and vendors want to do business with you.
• Landlords: Your PAYDEX score may affect whether landlords grant you a lease.
• Insurance companies: Your PAYDEX score may impact your insurance premiums.
• Lenders: Your PAYDEX score may affect loan terms or help lenders decide whether to lend you money.

A PAYDEX score isn’t the only business credit score available. D&B is one of several commercial credit reporting bureaus, along with Equifax® and Experian®, which offer scores such as the Equifax Business Credit Risk Score and Experian Intelliscore Plus℠. Another model, FICO® Small Business Scoring Service℠ (SBSS), also evaluates business credit risk.

Each scoring model uses different ranges and may be used differently when assessing the risk of doing business with your company. For example:

• Equifax Business Risk Score: Scores range from 101 to 992, with scores of 700 or higher generally considered lower risk. This model estimates the probability of delinquency or business failure by evaluating factors such as credit history, credit utilization and other financial indicators. 
• Experian Intelliscore Plus: Uses a scale of 1-100, with scores 80+ generally considered low risk. Generally, this model assesses broad risk and predicts the likelihood that your business will experience a severe delinquency within the next 12 months.
• FICO SBSS: These scores range from 0-300, with scores around 180-220 often considered low risk. Because this score factors in both personal and business credit, it’s important to maintain strong scores in each. Separating the two and using credit responsibly can help strengthen your business credit profile.

A score of 100 is the best possible PAYDEX score your business can receive.

D&B categorizes its scores as follows:

A PAYDEX score of 80 demonstrates that your company typically does a good job of paying its bills on time. Scores below 80 suggest some payments were made after their due dates.

Scores above 80 usually mean you’re making payments before the due date, sometimes several weeks early, and you may be considered lower risk by potential lenders, vendors and insurers.

Having a good PAYDEX score is important because it can signal lower risk to lenders and suppliers, but there are more benefits, including:

• Better loan and credit terms: A higher PAYDEX score can lead to easier approval for business loans or lines of credit, such as business credit cards. And you could see lower interest rates, better payment terms and higher credit limits. 
• Stronger business relationships: Your vendors, suppliers and partners may view your company as financially stable with a good PAYDEX score. This can help them feel more confident doing business with you for the long term.
• Easier to get insured: A higher PAYDEX score can indicate strong payment habits, which insurers may consider when evaluating your company’s financial risk. In some cases, strong business credit may help you qualify for more favorable insurance premiums.

A PAYDEX score is primarily determined by your business’s payment history, also known as trade experiences. These are payment events reported by suppliers, vendors and lenders that report to D&B as trade references. Whenever you make (or fail to make) a payment to a trade reference, they can report it to D&B, which may impact your PAYDEX score.

PAYDEX scores are also dollar-weighted measurements. This means that bigger bills and payments can have a heavier impact on your PAYDEX score than smaller ones. For example, paying off a $10,000 invoice quickly can influence your score more than a prompt payment on a $1,000 invoice.

To help build a strong PAYDEX score, here are a few tips to consider:

• Pay any bills on time or early: The best way to improve your PAYDEX score is to make early or on-time payments to your lenders, suppliers and vendors.
• Ensure your payments are reported: Ask your suppliers, vendors and lenders if they’re reporting your payments to D&B. If they’re not, encourage them to do so. Only payments that are reported can count toward your score.
• Negotiate longer payment terms, if needed: If you’re having trouble making on-time or early payments, consider asking for a longer payment window.
• Use a business credit card: Since D&B may include certain business credit card accounts as trade references, applying for a business credit card and using it responsibly might help your PAYDEX score. Plus, you can benefit from business card rewards while building your credit.
• Regularly monitor your PAYDEX score: Just like you can monitor your own personal credit score, you can monitor your business’s PAYDEX score. You can use score-monitoring tools from D&B to receive alerts when changes to your score occur.

A PAYDEX score is a type of business credit score—it reflects a business’s creditworthiness and payment history. Companies and individuals may consider your company’s PAYDEX score, including potential suppliers or partners, landlords, vendors and insurance providers. So, establishing and building a strong PAYDEX score can be a great way to help grow your business.

Looking to establish some trade references and improve your score? One way to get started is with a Capital One business credit card. Responsible use of your business credit card can help you earn rewards while building your business credit profile. And you can even see whether you’re pre-approved first, with no impact on your credit scores.