Paydex Scores – All You Need For Business Credit?

All too often, business owners make the mistake of assuming they have established a complete business credit profile, when all they have done is finished one small step of the business credit building process. For example, a company may go out and get a Duns number (Dun and Bradstreet) and build up their Paydex score, believing that this will separate their business from their personal credit and help them build a strong credit profile under their company name. There are 2 other business credit agencies besides Dun and Bradstreet that are just as important, if not more significant.


Dun and Bradstreet

More commonly known as D&B, Dun and Bradstreet is probably the most well known credit reporting agency. These agencies collect payment information on businesses from a variety of creditors and subsequently sell that information back to other creditors inquiring on whether or not a given company is creditworthy. D&B has algorithms that take all the information they obtain on a particular company and compile it into a single score called a Paydex. Paydex scores go from 1-100, but 75-80 usually constitutes a good score.


The creditors that primarily use D&B for reporting good and bad credit history are vendors that extend credit to their customers and are trying to determine if the company applying for extended payment terms is a credit risk. These extended payment terms are sometimes referred to as “Net terms.” Net30 terms means that a company has 30 days to pay the full balance of an invoice. If the balance is not paid on time, the vendor may charge a late fee or even report negative credit history under the business name.


Since D&B primarily deals with vendors, it is impossible to establish a solid business credit profile with only a Paydex score. If a business is trying to get a bank loan in their company name, the banks will not check D&B to determine creditworthiness, so the company will be forced to use its owner’s personal credit or possibly get declined altogether.



Equifax commercial credit is a popular option with most major lending institutions like banks. If a bank reports good or bad payment history on their business loans, there is a good chance it is to Equifax. Likewise, if a bank is trying to find out if they should lend to a company, they will want to see their Equifax credit profile.


This aspect of business credit can be a catch 22. It is very difficult to qualify for a bank loan, but in order to obtain a bank loan, you should have already established business credit. So how does a business establish a credit profile that banks like to see if they cannot get a bank loan in the first place to build that credit? One way is to back the loan with personal credit information and try to get the bank to report good payments in the business name. Another way is to find a bank that will do a business line of credit secured by a CD (certificate of deposit) for the same amount dollar amount as the line of credit. Having a strong Equifax score can be beneficial when trying to secure bank financing.



Experian business credit is primarily used by business credit cards. There is quite a bit of crossover between Experian and D&B, but for the most part credit cards will report to Experian. Before you go out and try to get business cards, it is best to get a few vendors that are reporting to D&B and hopefully Experian as well.

It is generally more difficult to get a business credit card that a vendor account, so with the accounts easiest to qualify for and work your way up. You may get declined a few times, but don’t get discouraged. Only apply for one or two at a time. Never “shotgun” your application to ten or twenty creditors at the same time. 


In order to build a strong business credit profile you can’t ignore any of these agencies. Before applying for an account, make sure you verify who they report to so you can keep track of which scores you still need to work on. Open up doors of different types of financing by building scores with all three credit bureaus.

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