Do you know commercial credit?
What is commercial credit? Trade credit is established in the name of the company and is based solely on the credibility of the company. But do you know what it takes to get started? Do you know the building blocks you need to follow to get started? Most companies don’t know what I’m talking about, but we show you the way to get started credibly.
The main FICO score used as part of the business world is known as the Paydex score given by Dun & Bradstreet.
This number shows the risk of the company’s ability to recover the terms of the credit or loan similar to the FICO score for personal credit.
The paydex score ranges from 0 to 100. The higher the score, the better the credit for your business. The score is based on the way in which the company pays the debt and the timeliness of the payment to the suppliers within the period established to repay the debt.
Most lenders look for a score of 70 or higher, but for the best results you should have at least an 80 score on Paydex. Let me show you how the paydex score is created.
Expectation of payment
The expected payment can arrive before 100
Payments are generally made within the 90 prepayment discount period
Payment is on time 80
Payment arrives in 14 days after 70 terms
Payment arrives in 21 days beyond 60 terms
Payment arrives in 30 days after 50 terms
Payment arrives in 60 days after 40 terms
Payment arrives in 90 days beyond 30 terms
Payment arrives in 120 days after 20 terms
Not available A
If you are in business, having a high Paydex score and establishing new credit is essential to continue building your business credit to help you obtain limits that could exceed $ 100,000.
It should only take about 60 days to get an excellent Paydex score. It is very easy to do this and you should start by obtaining a DUNS number which is the equivalent of a Dun & Bradstreet social security number.
When you get your DUNS number, your next goal is to start applying for credit from companies that will report your credit activity to Dun & Bradstreet, Business Experian, and Equifax.
Once these companies report your payment history, you’ll get that Paydex score on your business credit reports, specifically Dun & Bradstreet, Business Experian, and Equifax.
Your goal is to get credit from different creditors, use that credit regularly to help your business keep increasing your scores. Be sure to make your payments on time and on time to ensure your Paydex score stays above 80 for optimal results.
As you continue to make payments on time, it will be easier to obtain credit in the name of the business.