The last video in the Dun & Bradstreet Basics of Business Credit series discussed the difference between business credit and credibility. The next video introduces the different D&B scores in a business credit profile. There are five scores, divided into two categories: predictive-based and performance-based. There are three predictive-based and two performance-based scores. The predictive-based scores suggest how a business will perform over the next twelve months.
The first of these is the D&B Delinquency Predictor Score, which predicts whether a business will pay its bills on time. Next is the Financial Stress Score, which Dun & Bradstreet provides will predicts the possibility that a company will experience financial distress. Third, there’s the D&B Supplier Evaluation Risk Rating. Dun & Bradstreet provides that this rating expresses the likelihood that a business will stop delivering its goods and services. The purpose of predictive scores is to forecast a company’s expected performance based on information D&B collects through, trade tape, trade references and other sources.
The performance-based scores use historical information from a company’s D&B Credit Profile, in order to illustrate the company’s past performance. First, you have the D&B PAYDEX® Score. Dun & Bradstreet provides that this score indicates how a company has paid (or not paid) its bills each month, over the past 24 months. Second, there is the D&B® Rating, which Dun & Bradstreet states indicates a company’s net worth range based on financial statements and the company’s overall condition. If a company’s financial statements are not provided, Dun & Bradstreet will base the score on company size, industry, or other related factors.
These scores work together to help comprise a complete credit profile for your business. Your profile can be used to indicate your strengths to potential business partners, suppliers, or lending institutions. You can also submit positive payment history to Dun & Bradstreet for acceptance and approval to help impact your scores and ratings.