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Understanding the D&B Delinquency Score and Failure Score in D&B Credit


What Scores are Included in a D&B Credit Business Credit Report?

Dun & Bradstreet’s comprehensive credit reports, accessed through D&B Credit, are uniquely suited to help you assess not only a business's current state, but also its future outlook. The reports include several types of predictive (future) and performance-based (historical) scores, including the D&B Viability Rating, the D&B PAYDEX, and the D&B Failure Score. They’re based on predictive modeling analysis and take into account the full range of data that Dun & Bradstreet has available on a business, including past payment patterns, public filings and financial information. Reports also contain financial statements, trade payment data, legal events, corporate family trees, and other third-party web and social information.

What is a Commercial Credit Score?

Unlike consumer credit, there’s no one single credit score in commercial credit. Dun & Bradstreet provides multiple types of scores to help companies assess business credit risk on their customers, vendors, and partners. In Dun & Bradstreet’s DNBi platform, the Commercial Credit Score (CCS) predicts the likelihood of a business paying its bills in a severely delinquent manner (91 days or more past terms), obtaining legal relief from its creditors or ceasing operations without paying all creditors in full over the next 12 months. This score is known as the Delinquency Score in the new D&B Credit platform. The score ranges from 1 to 100, with higher scores indicating a lower probability of delinquency.

What is a Delinquency Predictor Risk Class?

A Delinquency Predictor Risk Class is a segmentation of the scorable universe into five distinct categories - low, low-moderate, moderate, moderate-high, or high – to classify whether businesses have the lowest probability of delinquency or the highest probability of delinquency. This Class enables a customer to quickly segment their new and existing accounts into various risk segments to determine appropriate credit policies. Note: Delinquency Predictors are not calculated for those businesses designated as Discontinued at This Location, Open Bankruptcy, or Higher Risk. These records are automatically assigned a score of zero (0).

How is severe delinquency defined?

A severely delinquent firm is defined as a business with at least 10% of its weighted dollars 91+ days slow. Dollars are weighted based on total balance of 91+ accounts compared to total balance owed.

What does a Delinquency Score of "Zero" mean?

Delinquency scores are not calculated for those businesses designated as "Discontinued at This Location," "Open Bankruptcy", "Higher Risk." These records are automatically assigned a score of zero (0).

What is the Failure Score and What Does it Mean?

D&B's Failure Score in D&B Credit is designed to help you predict the likelihood that a company will obtain legal relief from creditors or cease operations without paying all creditors in full over the next 12 months. The score uses the full range of Dun & Bradstreet information, including financials, comparative financial ratios, payment trends, public filings, demographic data and more.

Dun & Bradstreet defines a failed or financially stressed company as one that:

  • Ceased operations following assignment or bankruptcy
  • Ceased operations with loss to creditors
  • Voluntarily withdrew from business operation leaving unpaid obligations
  • Is in receivership, reorganization, or has made an arrangement for the benefit of creditors.

Voluntary discontinuance involving no loss to creditors is not defined as financially stressed.

The risk information for the Failure Score in D&B Credit is classified in two ways, from the broadest (the class) to the most specific (the numerical score.) The classifications are:

1. A "Percentile" of 1 - 100, where a 1 represents businesses that have the highest probability of financial stress, and a 100 which represents businesses with the lowest probability of financial stress. This Percentile shows you where a company falls among businesses in the D&B information base, and is most effectively used to rank order a portfolio from highest to lowest risk of business failure.

2. A level of risk "Class" which is a segmentation of the scorable universe into five distinct risk categories - low, low-moderate, moderate, moderate-high, or high – to classify whether businesses have the lowest probability of financial stress or the highest probability of financial stress. This Class enables you to quickly segment new and existing accounts into risk groupings to determine appropriate credit policies.

What does a Failure Score of "Zero" mean?

Failure Scores are not calculated for those businesses designated as "Discontinued at This Location," "Open Bankruptcy" or "Higher Risk." These records are automatically assigned a score of zero (0).

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