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 score and an individual FICO consumer 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 business score is calculated:
100 Expect payment may come early
90 Payments generally come within early
payment discount period
80 Payment is prompt
70 Payment comes 14 days beyond terms
60 Payment comes 21 days beyond terms
50 Payment comes 30 days beyond terms
40 Payment comes 60 days beyond terms
30 Payment comes 90 days beyond terms
20 Payment comes 120 days beyond terms
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 score. To start you will first want to apply for a
DUNS Number, a nine digit business identifying number, with Dun and Bradstreet.
The DUNS Number helps potential customers, lenders, and suppliers evaluate your business's credit worthiness.
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.
Ty Crandall is a published author and international authoritative expert on building personal and business credit profiles and accessing money for business owners.
He has spent over 12 years in the financial and credit arenas helping clients establish and maintain excellent business and personal credit scores.
Ty is currently the CEO of Elite Business Inc.
At Elite There he specializes in helping business owners establish excellent business credit scores and then leverage those scores to access cash and credit for their businesses. Ty is also the mastermind behind the release of the exclusive Business Cash Machine. The Cash Machine is the leading business cash and credit access system in the world today.
For more information on business credit scoring, business credit, or Ty Crandall, visit [http://www.BusinessCashMachine.com]
Article Source: http://EzineArticles.com/expert/Ty_Crandall/384096
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