The
main credit score used in the business world is known as a Paydex score
provided by Dun and Bradstreet. This number assess a business's lending
risk much the same as a consumer credit score reflects a consumer's
individual credit risk. Paydex is essentially the business equivalent
of your personal credit score. The exact definition from Dunn &
Bradstreet, or D&B is: The D&B PAYDEX® Score is D&B's
unique dollar-weighted numerical indicator of how a firm paid its bills
over the past year, based on trade experiences reported to D&B by
various vendors. There are many BIG differences from a business Paydex
credit score and an individual FICO consumer credit score. Consumer
FICO credit scores range from 350- 850. The Paydex Score ranges from
0-100 with 100 being the highest score you can obtain. Individual
credit scores are calculated based on a number of factors. The Paydex
score is calculated based on only one single factor; whether a business
makes prompt payments to its suppliers and creditors within the agreed
upon terms of payment. Most lenders and suppliers are looking for a
score of 70 and higher. Having a score of 80 and above is very good.
Here is a breakdown of how the Paydex credit score is calculated:
Payment Expectation Expect payment may come early
......................100 Payments generally come within early payment
discount period ....................................90 Payment is prompt
...............................................80 Payment comes 14
days beyond terms ..............70 Payment comes 21 days beyond terms
..............60 Payment comes 30 days beyond terms ..............50
Payment comes 60 days beyond terms ..............40 Payment comes 90
days beyond terms ..............30 Payment comes 120 days beyond
terms.............20
Unavailable.........................................................UN
If you own a business, your Paydex score is essential in establishing
new credit and continuing to build credit limits exceeding $100,000. It
only takes 60 days to establish a positive Paydex credit score. To
start you will first want to apply for a DUNS Number, a nine digit
business identifying number, with Dun and Bradstreet. Once your DUNS
number is established you will next want to find a merchant who will
extend you credit and then report that credit to Dun and Bradstreet.
Once you have positive business credit report to Dun and Bradstreet you
will have a positive Paydex score established. You will want to then
apply for more business credit and use it regularly. Make sure you pay
all payments back early to raise your scores to 80 or higher. You can
easily and quickly establish a positive Paydex credit score. As you
continue to pay your bills timely your scores will continue to raise
giving you the ability to qualify for credit in your business name.
Attila Thiry is currently the CEO of BCP Business Funding. At BCP Business Funding
he specializes in helping business owners establish excellent business
credit scores and then leverage those scores to access cash and credit
for their businesses. Attila is also an industry leader at securing
alternative financing for entrepreneurs and business. The Business
Credit and Funding Suite is the leading business cash and credit access
system in the world today. For more information on business credit
scoring, business credit, visit www.businesscreditprofiles.com.
Article Source: http://www.compensationsecrets.co.uk/