ASSETPROFILE GROUP, LLC

CORPORATE CREDIT SCORE FOR SMALL BUSINESS, HOW DOES IT WORK?

The preparation and maintenance of a corporate credit profile enables the business owner to build corporate credit. Since businesses are ranked and rated in different ways by a variety of organizations, it’s helpful to know the basics and the differences between them.

small business credit stats
D&B Paydex registration information

registering for a D&B Paydex score

When registering for a D&B Paydex score, make certain that the registration information matches with the Secretary of State in the state in which the company was filed. For example, if your company was filed in Wyoming, and also filed in Florida, then make certain that both states report the same information as what you place on the registration. That applies to all information, such as your name as Director, all officer positions, address of the company, etc.

Since there are many companies filed with similar names, DNB doesn’t like inconsistent or confusing information. Your first step to make certain all data reflecting your company is the same from the Secretary of State to the local business license. You must receive mail at that address. And the Director and officers must truly be involved in the day-to-day operations of the business.

Dun and Bradstreet (DNB.com) grants a score to a business that represents how prompt payments are made to creditors. Paydex defines this for business in terms of a number, such as a credit score. 0 is the lowest score and 100 is the highest. By looking up the Paydex score, a supplier or vendor consider in establishing a trade line with any business. A score of 75 is a reasonably good score. So, there you have it, Paydex is a credit score for business.

Issues Involving a Paydex Score

D&B Credit Report

Creditors run a D&B Business Credit Report to check your Paydex score and history. This is to confirm your business, you and what you're doing. The D&B Business Credit Report is not used to approve the credit line. It's used as means to confirm identity.

Tracking

Paydex is calculated and monitored daily whereas your personal credit history is tracked monthly. This means that if you pay a business line of credit a day late, this will negatively impact your Paydex score.

Paydex Score Over 80

A Paydex score of over 80 means that your business pays early. This is a plus, but not necessary because no one requires a score of over 80. Striving for a score of over 80 won't help your business.

Paydex Score Of 80

A Paydex score of 80 means that your business pays everything on time and you're not one day late.

Paydex Score Of 70

75 is a good Paydex score. Some lenders require at least a 70 Paydex score. Anything less than 65 seldom results in any lines of credit.

Below is a table of payment behavior and a corresponding Paydex score:

payment vs paydex tracking

Create Paydex Scores

You need to create a few Paydex scores. So, let's pick a few vendors known for fast reporting. This means you need to buy something from them over $50 to create the debt, and then pay it on time. And don't be one day late! The following vendors report your Paydex score immediately. When ordering, ask for a Net 30 account. This means you must pay within 30 days. A couple of cash orders may be necessary prior to them providing a Net 30 account. If that's the case, then pay cash for the items, and then follow up on more orders and then request a Net 30 account. This is what you need to prepare:

D&B Rating, PAYDEX®, and Score Tables* - United States

Click here to view scores and ratings tables for businesses outside the United States.

* NOTE:

The scoring tables presented here refer to the version 6 (2002) Commercial Credit Score and Financial Stress Score. This information on the scores is applicable to the Credit Scoring Report and Financial Stress Scoring Report.

D&B Rating Interpretation Table

The US 5A to HH ratings reflect company size based on net worth or equity as computed by D&B. These ratings are assigned to businesses that have supplied D&B with current financial information.

 

The 1R and 2R ratings categories reflect company size based on the total number of employees for the business. They are assigned to business files that do not contain a current financial statement. For 5A to HH Ratings, the Composite Credit Appraisal is a number between 1 and 4 that makes up the second half of the company’s Rating and reflects an overall assessment of creditworthiness. Our creditworthiness assessment is based on both payments and financial stability. In 1R and 2R Ratings, the 2, 3, or 4 creditworthiness indicator is based on analysis by D&B of public filings, trade payments, business age and other important factors. 2 is the highest Composite Credit Appraisal a company not supplying D&B with current financial information can receive.

Financial Strength

Composite Credit Appraisal

Rating US$ High Good Fair Limited
5A
50,000,000 and over
1
2
3
4
4A
10,000,000 to 49,999,999
1
2
3
4
3A
1,000,000 to 9,999,999
1
2
3
4
2A
750,000 to 999,999
1
2
3
4
1A
500,000 to 749,999
1
2
3
4
BA
300,000 to 499,999
1
2
3
4
BB
200,000 to 299,999
1
2
3
4
CB
125,000 to 199,999
1
2
3
4
CC
75,000 to 124,999
1
2
3
4
DC
50,000 to 74,999
1
2
3
4
DD
35,000 to 49,999
1
2
3
4
EE
20,000 to 34,999
1
2
3
4
FF
10,000 to 19,999
1
2
3
4
GG
5,000 to 9,999
1
2
3
4
HH
Up to 4,999
1
2
3
4

Rating Classification

Composite Credit Appraisal

Rating Number of Employees High Good Fair Limited
1R
10 employees and over
1
2
3
4
2R
1 to 9
1
2
3
4

Alternative Ratings Used

Limited
INV
Indicates that D&B is currently conducting an investigation to gather information for a new report.
DS
Indicates that the information available does not permit D&B to classify the company within our rating key.
-- (blank)
The blank symbol should not be interpreted as indicating that credit should be denied. It simply means that the information available to D&B does not permit us to classify the company within our rating key and that further enquiry should be made before reaching a decision. Some reasons for using a "-" symbol include: deficit net worth, bankruptcy proceedings, lack of insufficient payment information, or incomplete history information.
ER
Certain lines of business, primarily banks, insurance companies and government entities do not lend themselves to classification under the D&B Rating system. Instead, we assign these types of businesses an Employee range symbol based on the number of people employed. No other significance should be attached to this symbol. ERN should not be interpreted negatively. It simply means we do not have information indicating how many people are employed at this firm.
NQ
Not Quoted. This is generally assigned when a business has been confirmed as no longer active at the location, or when D & B is unable to confirm active operations. It may also appear on some branch reports, when the branch is located in the same city as the headquarters.
US Employee Range Designation
ER1
1000 or more employees
ER2
500 to 999 employees
ER3
100 to 499 employees
ER4
50 to 99 employees
ER5
20 to 49 employees
ER6
10 to 19 employees
ER7
5 to 9 employees
ER8
1 to 4 employees
ERN
Not Available

D&B Score Interpretation Table

D&B PAYDEX Score Payment Habit
100
Anticipate
90
Discount
80
Prompt
70
15 days beyond terms
60
22 days beyond terms
50
30 days beyond terms
40
60 days beyond terms
30
90 days beyond terms
20
120 days beyond terms
UN
Unavailable

D&B PAYDEX Value Table

PAYDEX Average Days to Pay
100
30 days sooner than terms
99
29 days sooner than terms
98
28 days sooner than terms
97
27 days sooner than terms
96
26 days sooner than terms
95
25 days sooner than terms
94
24 days sooner than terms
93
23 days sooner than terms
92
22 days sooner than terms
91
21 days sooner than terms
90
20 days sooner than terms
89
18 days sooner than terms
88
16 days sooner than terms
87
14 days sooner than terms
86
12 days sooner than terms
85
10 days sooner than terms
84
8 days sooner than terms
83
6 days sooner than terms
82
4 days sooner than terms
81
2 days sooner than terms
80
ON TERMS
79
2 days beyond terms
78
3 days beyond terms
77
5 days beyond terms
76
6 days beyond terms
75
8 days beyond terms
74
9 days beyond terms
73
11 days beyond terms
72
12 days beyond terms
71
14 days beyond terms
70
15 days beyond terms
69
16 days beyond terms
68
17 days beyond terms
67
18 days beyond terms
66
19 days beyond terms
65
19 days beyond terms
64
19 days beyond terms
63
20 days beyond terms
62
21 days beyond terms
61
22 days beyond terms
60
22 days beyond terms
59
23 days beyond terms
58
24 days beyond terms
57
25 days beyond terms
56
26 days beyond terms
55
26 days beyond terms
54
27 days beyond terms
53
28 days beyond terms
52
29 days beyond terms
51
29 days beyond terms
50
30 days beyond terms
49
33 days beyond terms
48
36 days beyond terms
47
39 days beyond terms
46
42 days beyond terms
45
45 days beyond terms
44
48 days beyond terms
43
51 days beyond terms
42
54 days beyond terms
41
57 days beyond terms
40
60 days beyond terms
39
63 days beyond terms
38
66 days beyond terms
37
69 days beyond terms
36
72 days beyond terms
35
75 days beyond terms
34
78 days beyond terms
33
81 days beyond terms
32
84 days beyond terms
31
87 days beyond terms
30
90 days beyond terms
29
93 days beyond terms
28
96 days beyond terms
27
99 days beyond terms
26
102 days beyond terms
25
105 days beyond terms
24
108 days beyond terms
23
111 days beyond terms
22
114 days beyond terms
21
117 days beyond terms
20
120 days beyond terms
1 to 19
Over 120 days beyond terms

Financial Stress Score

The Financial Stress model predicts the likelihood of a firm ceasing business without paying all creditors in full, or reorganizing or obtaining relief from creditors under state/federal law over the next twelve months. Scores were calculated using a statistically valid model derived from D&B’s extensive data files.
financial stress score predictor

Financial Stress Score

Financial Stress Class Financial Stress Score Range Percentile Score Range Incidence of Financial Stress
1
1377-1875
21-100
0.49%
2
1353-1376
11-20
1.37%
3
1303-1352
5-10
3.73%
4
1225-1302
2-4
8.30%
5
1001-1224
1
35.80%
bankruptcy indication of a business

“0” generally denotes indication of open bankruptcy or out of business at the location. “0”may also denote higher risk situations.
The Incidence of Financial Stress -National Average for all firms in the United States in D&B’s file is 1.4%.
The Incidence of Financial Stress shows the percentage of firms in a given Class that discontinued operations over the past year with loss to creditors. The Incidence of Financial Stress-National Average represents the national failure rate and is provided for comparative purposes. All Financial Stress Class, Percentile, Score and Incidence statistics are based on 2001.

Commercial Credit Score

The US Commercial Credit Score predicts the likelihood of a firm paying in a delinquent manner (90 + days past terms) during the next 12 months, based on the information in D&B’s file. The score was calculated using statistically valid models derived from D&B’s extensive data files.
commercial credit stats

Commercial Credit Score

Commercial Credit Score Credit Score Percentile Credit Score Class Incidence of Delinquency
536-670
91-100
1
2.5%
493-535
71-90
2
4.8%
423-492
31-70
3
12.9%
376-422
11-30
4
24.2%
101-375
1-10
5
58.8%
indication of open bankruptcy
“0” generally denotes indication of open bankruptcy or out of business at the location. “0”may also denote higher risk situations.

Incidence of Delinquent Payment Assignment Table

Minimum Score Maximum Score Incidence of Delinquent Payment
96
100
2.1%
91
95
2.9%
86
90
3.6%
81
85
4.4%
76
80
5.2%
71
75
6.1%
66
70
7.3%
61
65
8.7%
56
60
10.5%
51
55
12.2%
46
50
13.9%
41
45
15.5%
36
40
17.2%
31
35
18.4%
26
30
20.2%
21
25
22.5%
16
20
24.6%
11
15
29.6%
6
10
44.9%
1
5
72.7%

Delinquent Payment

The Incidence of Delinquent Payment for all firms in the United States in D&B’s file is 17.3%.

 

The Incidence of Delinquent Payment shows the percentage of firms in a given percentile range that paid in a delinquent manner (90 + days past terms) over the past year. The Incidence of Delinquent Payment among all firms in D&B’s files represents the national delinquency rate and is provided for comparative purposes. All Commercial Credit Class, Percentile, Score and Incidence statistics are based on 2001.

Delinquent Payment for D&B
shelf corporations and llc details

SHELF CORPORATIONS AND SHELF LLC'S

BASIC OPERATIONS

BUILD CORPORATE CREDIT