PAYDEX® : Business Definition
Business Definition for: PAYDEX®
- What is the PAYDEX?
- What influences my PAYDEX?
- Who uses PAYDEX and for what purposes?
- How can I improve my PAYDEX?
The D&B PAYDEX is a unique, dollar weighted indicator of a business's payment performance based on the total number of payment experiences in D&B's file. The D&B PAYDEX ranges from 1 to 100, with higher scores indicating better payment performance.
Payment experiences are gathered by D&B from suppliers and vendors this firm does business with. Each experience reflects a different supplier and reflects how bills are met within relation to the terms granted. Up to 875 payment experiences are used to generate the PAYDEX Score and up to 80 representative payment experiences are reported in your credit report.
Use this key to help you interpret the D&B PAYDEX:
 | Risk Interpretation | ||
|---|---|---|---|
 | 80-100 | LOW risk of late payment (averages prompt to 30 days within terms) | |
 | 50-79 | MEDIUM risk of late payment (averages 30 or less beyond terms) | |
 | 0-49 | HIGH risk of late payment (averages 30 to 120 days beyond terms) | |
How many payment experiences are required to establish a PAYDEX?
D&B requires at least 4 of your payment experiences on file in order to create a PAYDEX for your business.
Risk categories were created to make it easier to translate the PAYDEX into understandable risk groups:
| PAYDEX 80-100: | Low risk of late payment |
| PAYDEX 50-79: | Moderate risk of late payment |
| PAYDEX 0-49: | High risk of late payment |
Based on changes to your PAYDEX, D&B takes a proactive approach to notify you when a change in your score is bringing you closer to a different risk category.
As an example, if your PAYDEX declined from 60 to 55, you would receive a message within your alert that you are approaching a High risk category (PAYDEX 0- 49). That is, another significant decline in PAYDEX (from 55 to 50) would already categorize you as higher risk of late payment.
Your PAYDEX reflects past payment history and payment trends. Payment experiences are gathered by D&B from suppliers and vendors a firm does business with. Each experience reflects a different supplier and reflects how bills are met within relation to the terms granted. Up to 875 payment experiences are used to generate the PAYDEX and up to 80 representative payment experiences are reported in your credit report.
To see your payment experiences that D&B has on file, please refer to the "Payments" section of your report.
Who uses PAYDEX and for what purposes?
Suppliers, banks, lessors, landlords, and customers all use the PAYDEX for various reasons including:
- Determining whether to accept a sale, set terms, or reject an account
- Assessing whether you pay delinquently or not at all
- Deciding if your account should be forwarded for 3rd party collection
- Determining interest rates and insurance premiums
- Considering you as a stable supplier
You can improve your PAYDEX by addressing those areas of your business that most influence the score. Here are some steps you can take:
- Review your D&B report and make sure it is complete and up to date with the most current and accurate information:
- If you have questions about the payment experiences in your report, please call us at 1-800-700-2733.
- Make every effort to pay your bills on time - your payment behavior is the sole factor influencing your PAYDEX.
- Add additional payment experiences to your D&B credit file - to learn how, please call a D&B Customer Service representative at 1-800-700-2733.
© 2013 Dun & Bradstreet Credibility Corp.
