3 Tips to Boost Your Paydex Score

tips to boost your paydex score

As a small business owner, you already know how important it is to stay on top of your credit. What you may not know much about is your Paydex score and what it means for your small business. According to Dun & Bradstreet, your Paydex score is the “unique dollar-weighted numerical indicator of how a firm paid its bills over the past year, based on trade experiences reported to D&B by various vendors”.

The score ranges from 0-100 with a score of 90 or above indicating an excellent payment record and a score of below 70 signaling a poor performance. It is critical to understand your Paydex score since it directly influences your ability to obtain financing to fuel the growth of your business. Read this Balboa Capital blog post to learn three tips to boost your Paydex score.

1. Pay bills early.

Since your Paydex score is directly related to your payment history, the best way to improve it is to pay bills as early as possible. Simply paying bills on time will not necessarily increase your score. You must pay before the invoice is due in order to raise your score. To elevate your score above 80, you would typically need to pay your bill before the invoice is actually sent.

2. Monitor your credit regularly.

Be diligent in monitoring your business credit history and address any errors you may find, such as falsely reported past due accounts. Confirm that your payment performance is accurate and be sure to follow up with creditors on any discrepancies.

3. Keep credit active.

Similar to a personal credit profile, keeping your credit lines active can help boost your business’s credit score. You may have a score of 75, which is equivalent to a 700 FICO score, but if there is no continuous business credit activity, your score may actually decrease.

Summary.

By working on your Paydex score before you apply for small business funding, you will be in a better position for borrowing. We hope this has you thinking about ways you can improve your Paydex score and your overall business credit performance. Being proactive about your business and personal credit profile will ultimately help you secure growth capital when you need it.