Business Credit Scores and Ratings

Changes to a Business’s Delinquency Predictor Score

What Is the Delinquency Predictor Score?

The D&B Delinquency Predictor Score predicts the likelihood that a company will pay in a severely delinquent manner, seek legal relief from creditors, or cease operations without paying all creditors in full during the next 12 months based on information in the Dun & Bradstreet Data Cloud. A severely delinquent company is defined as a business with at least 10% of its dollars more than 90 days past due.

What Does the Delinquency Predictor Score Look Like?

The Delinquency Predictor Score comprises three components: a percentile of 1 to 100, a class of 1 to 5, and the score itself, which ranges from 101 to 670, with the lowest score representing the highest level of risk that a business will fail in the next 12 months.

Like the D&B® Failure Score, the risk information is classified in three ways, from the broadest (the class) to the most specific (the score.) The classifications are:

  1. A score between 101 and 670, where 101 represents businesses that have the highest probability of severe delinquency and 670 represents businesses with the lowest probability. This score provides a direct relationship between the score and the level of risk and enables the more granular cutoffs typically used in automated decisioning.
  2. A percentile between 1 and 100, where 1 represents businesses that have the highest probability of severe delinquency and 100 represents businesses with the lowest probability. The percentile shows where a company falls among businesses in the Dun & Bradstreet Data Cloud and is most effectively used to rank a portfolio from highest to lowest risk of severe delinquency.
  3. A class between 1 and 5, which segments the scoreable universe into five distinct risk groups, with 1 representing businesses that have the lowest probability of severe delinquency and 5 representing businesses with the highest probability. The class helps you to quickly segment new and existing accounts into risk groupings to help determine appropriate credit policies.

What Is a Good D&B Delinquency Predictor Score?

The Delinquency Predictor Score ranges from 101 to 670, where 670 is the “best” score (it indicates the business has the lowest probability of severely late payments) and 101 is the “worst” score (indicates the business has the highest probability of paying severely late).

How is the Delinquency Predictor Score Calculated?

Dun & Bradstreet uses predictive modeling analysis to make informed decisions about the likelihood that a business will become severely delinquent on its accounts. These models rely upon data that Dun & Bradstreet regularly collects about businesses, including Trade References*, public filings (lawsuits, liens, judgements, and bankruptcies), and financial statements. The Delinquency Predictor Score examines a company’s past trade payment obligations (including granular payment data that captures month-to-month trends) that were submitted to Dun & Bradstreet, as well as firmographic data, public information, and financial data to determine the probability of future delinquency on 30 million US businesses. Because of the expansive set of data inputs, the Delinquency Predictor Score can even help to provide a more reliable risk assessment for businesses with limited or no commercial trade payment history.

The Delinquency Predictor Score is recalculated every time Dun & Bradstreet collects a new relevant piece of information about a company, or when information changes. For example, the longer a company is in business, the more its risk typically decreases, and the score may change annually to reflect this.

Although other companies have delinquency scores, only the D&B Delinquency Predictor Score has the breadth of data, from the Dun & Bradstreet Data Cloud, that provides the actionable predictive information and superior analytic methodology that makes it a more forward-looking assessment.

Why Does the Delinquency Predictor Score Matter?

Vendors, financial institutions, and landlords are just a few of the partners who may check the Delinquency Predictor Score when making decisions about a business. In other words, changes to the score may impact a company’s bottom line. While many businesses may pay slowly from time to time, most do eventually pay before hitting the 90+ days late mark. Severe payment delinquency can impact decisions to accept or reject new business credit applicants and whether to change credit limits extended to existing customers.

For companies that extend trade credit, the Delinquency Predictor Score can help assess potential risk without the need to conduct extensive research of their own. It provides guidance to setting credit limits, payment terms, and upfront deposit amounts.

Has Your Delinquency Predictor Score Recently Changed?

If your Delinquency Predictor Score or Percentile has decreased or you’ve moved to a higher Risk Class, Dun & Bradstreet has determined that based on information in the Dun & Bradstreet Data Cloud, your business is more likely to become severely delinquent on at least 10% of its accounts over the next 12 months.

If your Delinquency Predictor Score or Percentile has increased or you’ve moved to a lower Risk Class, Dun & Bradstreet has seen indications that your business is less likely to become severely delinquent on at least 10% of its accounts over the next 12 months.

What Does It Mean to Be Severely Delinquent on Business Debts?

Dun & Bradstreet considers a company to be severely delinquent when it is 91+ days overdue on at least 10 percent of its debts.

How Can I Impact My Delinquency Predictor Score?

Dun & Bradstreet bases its business credit scores and ratings on information it collects about companies. Because missing data can’t be factored in, it’s important for business owners to verify company details and to submit Trade References for consideration.*

Company Update is a free tool that allows a business to confirm its basic business information, while CreditBuilder provides unlimited access to your company’s Dun & Bradstreet credit scores and ratings, as well as the ability to add Trade References.* Understanding the Delinquency Predictor Score and taking steps to manage your business’s credit file can help you avoid unwelcome surprises when it comes to your company’s credibility.

*Trade References will be added subject to Dun & Bradstreet verification and acceptance. Trade References are counted as fulfilled when a qualified reference is successfully added to your report. Please see the Trade References glossary page for eligibility, process, and other information regarding Trade References.

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