Business owners: Do you know your PAYDEX score?

As many of you know, I am a business owner, and maintaining my business credit is just as important as maintaining my personal credit.  In the business world, a company does not have a FICO score; instead, it has a PAYDEX score, a rating maintained and calculated by Dunn & Bradstreet. 

According to its website, Dunn & Bradstreet, or D&B for short, is the world’s leading source of commercial information and insight on businesses. Its global commercial database contains more than 140 million business records, which provide customers with quality business information and the ability to make informed decisions.  Customers primarily use D&B’s resources to mitigate credit and supplier risk.  It provides a wide range of business statistics such as liquidity ratios, asset management ratios, debt management ratios, and many other benchmarking tools.  The most popular tool is the PAYDEX score.

The PAYDEX score is D&B’s unique dollar-weighted numerical indicator of how a firm paid its bills over the past year, based on up to 55 percent trade experiences reported to D&B by various vendors.  The D&B PAYDEX score ranges from 1 to 100, with higher scores indicating better payment performance.  A score of 75 is roughly equivalent to a FICO score in the low 700s. 

The D&B website is impressively thorough, much more comprehensive than any site for personal credit. (I am not aware of any personal credit bureau that gives you a sample of its report online with a detailed explanation.) As for business credit reports, you can even view a sample of all three types of reports that D&B offers: the Basic Credit Report, the Standard Report, and the Premium Credit Report.  The cost per report is $59, $119, and $159 respectively.

If you are in business and have requested credit before, chances are a company has requested your D&B credit report.  Many startups and small businesses are not aware that they have a DUNS Number and corresponding credit report. Your creditors or vendors can report payment history about you and D&B will assign you a D&B DUNS number.  As with personal credit, it is extremely important that you be proactive in making sure that your company credit report is accurate and complete; that you find out what your PAYDEX score is; and that you learn how to obtain and to maintain the best report and PAYDEX score possible.  

Finally, if you are in business, I strongly recommend that you read everything on the D&B website, because it is an essential step toward effectively managing your business credit, which will help to drive down costs and improve cash flow. 

Comments

[Cynthia Jones]

Dun and Brandstreet illegally sells or transfer invalid data. They should be held accountable the same as other presenters of Credit information and fined for claiming to validate inaccurate data. I closed a business two years ago through the State of Colorado and they allegedly validated its current existence in my name through an online publisher Corproation Wiki.

I am sick of the alleged CRA's business and Personal gaining greater riches and assets at the expense of consumers and business.

America's citizens need to drive all of them out of business if they cannot abide by our laws.

[Alan pfunk]

D & B is a scam outfit. making up numbers as they go. Do not fall for it. My bills are always paid .Not what they say.

[MWinVA]

Just went through the same extortion attempt with D&B this morning. While looking at my real-time quickbooks report I could verify that not a single dime is overdue, nor has been paid more than 7 days late in the last 2 years, yet they claimed that they had a report that indicated otherwise and it had caused them to lower my paydex score. But, if I would simply pay them $499.00, they would tell me who reported the late payment(s) and offer to dispute it. No, I do not play the extortion game. I simply tell my vendors when asked, that "We don't deal with Dunn & Bradstreet"; their information is outdated and inaccurate. Then I give them our standard list of active vendors & bank reference. This needs to be addressed by our state AG.

[mk]

I think it's time for the government to re-examine the fair credit reporting act and include business credit as well. Every time you speak with these people at D&B they try to sell you $400+ monitoring which is required if you would like for a vendor to report on your company. Most of my vendors are COD or CBD for the first few transactions then will extend net 30. They don't rely on D&B to assess MY risk, therefore they don't report my excellent payment history to D&B. Per the SALES agent I spoke with today "We don't take unsolicited reports".

The burden of proof of credibility should rely on the agency reporting the information. If they only take reports from companies that pay, where is the balance and equity in that? As in life, the big guy does what he wants and the little guy has to sit there and take it. Who is reporting on the legitimacy and credibility of D&B? Yeah, they've been around for over 100 years, want me to name some other dinosaurs?

[Liz]

My experience was exactly the same as Kurt's. We were told we had tons of negative reports, even though the corporation in question hardly uses credit.

After paying them $690, they "reinvestigated". Literally within 24 hours, all these supposed negative entries were gone. Of course, they won't disclose what they were, only amounts and that the "provider" said to remove them. Most were $850-$1000, and we have NO accounts of this type.

This is beyond a scam, it's extortion. We do government work and they check D&B. So it's either pay up, or get no contracts.

[Kurt Liestenfeltz]

D&B is A SCAM to be sure!

I called D&B to remove a second 'entity' that didn't exist. They then explained that I had a "less than favorable rating(s)" and if I joined for $700/yr, I can submit more references. I joined just so I can make sure everything was letter perfect as the government's CCR & WAWF payment system is directly tied to D&B.

A week later I received an email 'alert' saying that a rating of mine had improved. Today, another week later I received another 'alert' saying another rating improved. I hadn't done a thing except pay them the $700 and all of a sudden my ratings are improving!

They don't even say who is reporting to them the timeliness of my payments to vendors. I pay very fast, I don't use credit, yet this is one of the items they cited when roping me in to pay; that I was slow to pay, some 17 days later than the 'norm'.

SCAM, SCAM, SCAM

[Chris Hutchins]

After 13 of being in business and having stellar supplier relationships, I just learned that D&B is issuing horrible credit rating for our business. When I called, I was told that I should pay $719 to become a member and that would help the score. What is going on? How is this legal? I've never commented on a blog before but decided to Google D&B law suit and I have found others with the same complaint. If there's an attorney out there who would like to open a class action law suit against D&B please contact me. I'd like to be a part of getting this unethical company off the map.

[Judith Weinstein]

It's literally a threat. "You either purchase our offer or we will destroy your credit. I will be one of the first to join a class action law suit against D&B. The government should be involved to shut them down. How could small businesses (core of US economy)survive & thrive if businesses like D&B destroy their credit? I have been in business for almost 20 years & recently found out that $159.00 purchase was declined terms based on D&B report. The explanation from D&B was "due to the economy & the fact that businesses are closing we have to be extra cautious".Indeed businesses are closing some perhaps from D&B's report.I am outraged to say the list.

[anonomous]

I wonder if some attorney could start a class action suit? I would be happy to contribute my experience with this same extortion method of trying to get our company to pay or they would lower our credit score. I am seeing I am not alone in this experience.

[Margot]

We are getting calls from Dun & Bradstreet selling this "service" and, frankly, I would call it nothing but extortion. I can't believe it's even legal. Personal credit Score Companies are prohibited from contacting customers in this way for this very reason.

This guy has a good take on this scam on his blog:
http://bit.ly/AgaveMountainBlog

Still, I'm afraid to antagonize them and my boss might just capitulate and pay them the money to "sign up" (an annual fee in excess of $800) because we are both concerned that they will "retaliate" by giving us a bad report if we don't.

It's like blackmail!

Frankly, I'm wondering if this blog is just another one of those fake blogs that's really advertising for services and goods. Why are you plugging this "service?" Did you pay to play with them? If so, why?

[DW]

I think D&B is a HUGE scam. We were declined business credit based on a D&B report. We contacted D&B. We were told by them that we would be given no information about our sheet unless we became D&B members (cost approx $400). We were also told that we couldn't change any information unless we were members. Currently, a MADE UP name is listed as my company's CEO. NO SUCH PERSON exists - it is our email address. D&B would only "help" if we paid to play.

We were turned down for credit and D&B was cited as the source of the info. We went to another lender, TD Bank, who completely agreed that the D&B was inaccurate and gave us credit despite was D&B reported. So I find it to be extortion that I should have to pay them to get simple facts straight and pay them if I want to see what they report and pay them if I want to fix what they got wrong.

Am I alone in this experience? Does this seems accurate or did we get either a completely clueless D&B rep or just one who wanted to aggressively sell us a D&B membership?