As a small business owner, you probably already realize how vital building business credit is to your business. Without good business credit, even the best ideas and intentions can wither and die. The question is: what is the secret to building business credit? The answer may be in your PAYDEX® score. Here’s what you need to know about building credit with a PAYDEX® score.
The PAYDEX® Score
The PAYDEX® score is the most important credit score with respect to business. Created and administered by Dun & Bradstreet, this is the score that lenders will look at when deciding whether or not to offer you a loan, and other businesses may consider when trying to determine your strength in the marketplace. The PAYDEX® score falls on a scale of 0 to 100, with 100 being the best score, and anything 80 or higher being good enough to show that you are a good credit risk. The lower you drop below 80, the more likely you are to be hurting your business by locking yourself out of the most favorable loan opportunities.
Using the PAYDEX® Score to Build Business Credit
So how can you use the PAYDEX® score for building business credit? Simple. Just raise your score. The higher your score is, the better your business credit is likely to be. Raising your PAYDEX® score is simply a matter of paying your bills on time. If you’re prompt with payment, your score will be good. If you’re regularly late, then your score will drop. In fact, the best way to really boost your score is to make your scheduled payments ahead of time on a regular basis. Companies that do this are the ones that end up with the most sterling credit scores. To find out more about credit reports and credit scores for business, there are resources you can peruse at the Dun & Bradstreet Resource Center.