PAYDEX: Understanding Your Score

Updated: Feb 3

I was recently asked this question by one of our Twitter followers: "So many different descriptions... What exactly is a "good" Paydex score?" At first, I thought she was kidding. I mean, really... How many different explanations can there be?

But then I searched the Twitter hashtag #paydex that I saw what she was talking about. There were so many people and companies touting their own versions of what a Paydex score is, and ways to get one, and what is considered a good score... There was even one high-dollar, so called "credit guru" who promotes a service to get clients "a perfect 100 Paydex score in 90 days." It was amazing, and actually, a little scary...

While employed at Dun & Bradstreet, people were actually fired for identifying any Paydex score as being a "perfect" score. It became such an issue, I instituted into the trainee manual to instead define the Paydex score as ranging from 0 to 100, with 80 being the "optimum" score.

Since there is so much misinformation out there, here's some legitimate information every business owner or manager should know:

A Paydex score is just one of six creditworthiness scores provided by Dun & Bradstreet (also known as D&B), the world's oldest and largest corporate credit reporting agency. Over its 180 year history, D&B has devised specific algorithms to assign a strategic value to a business's history of repaying debt. The higher the score, the more promptly debt is paid. A lower score is indicative of slow payment, collections, or bad debt write-off.

The Paydex score is dollar-weighted, placing a higher value to larger debt being paid promptly. Even so, those with high positive payments can be negatively impacted if they have multiple inst