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Q: I’ve heard friends talking about their Dunn and Bradstreet score, but I’ve never heard of it before. What is it?
A: The Dunn and Bradstreet Commercial Credit Score is a credit score for a business, rather than for an individual. It is more comprehensive than a personal credit score. To figure out this score, Dunn and Bradstreet looks at financial statements, dealings with customers, creditors, and vendors, as well as number of employees, payment history, and anything that may affect a company’s ability to pay its bills.
The Commercial Credit Score is very helpful for banks considering lending to a business, or for vendors who want to know if they will get paid in a timely manner. It can also be useful to potential investors, since many late payments can clue an investor in that the business is struggling.
The score ranges from 101 to 670, and as with your personal score, the higher the number, the better the company is doing. The Commercial Credit Score also ranks the business on a scale of 1 to 5, with 5 being the most risky, and as a percentile compared to its competitors. 100th percentile would mean that the company is less risky than all (or nearly all) of its competitors.
Dunn and Bradstreet also has a Paydex score that is solely concerned with if you pay your bills on time. After a potential creditor checks your business’s Commercial Credit Score, they will most likely check your Paydex score. This score ranges from 1 to 100, and most creditors require a score above 70. If your score is below 70, this means that your business often pays its bills more than two weeks late.