When you’re making a decision about trade credit, the decision usually hinges on one central question: Will this business pay its bills on time?
Whether you approve or deny trade credit, set specific limits, or grant favorable terms depends on how you assess risk.
Dun & Bradstreet credit files are widely used by suppliers, manufacturers, wholesalers, and lenders to evaluate payment behavior before extending credit or setting terms. Unlike consumer-focused models, a D&B business credit report is more heavily influenced by payment history than debt.
What Is a Dun & Bradstreet Credit File?
A Dun & Bradstreet credit file consolidates trade payment experiences, risk indicators, and public records associated with a specific company. D&B collects data from suppliers, lenders, and public sources to build a payment-focused profile of a company’s credit behavior.
How Lenders and Suppliers Use D&B Business Credit Reports
Suppliers frequently rely on D&B business credit reports to decide whether to offer net terms, determine credit limits, or require prepayment. D&B uses what it calls PAYDEX scores, a 1–100 rating of how consistently a business pays its suppliers on time.
What Is a Good PAYDEX Score at D&B?
Typically, a good PAYDEX score is 80 or higher. D&B says this indicates “a strong signal of on-time payments and lower short-term risk.” Lower scores indicate a higher level of risk, so when you see lower scores, you may want to adjust credit terms to match your risk.
How Can You Use PAYDEX Scores?
It’s a good idea to track PAYDEX scores over time. A company may stay within a particular score range, but if it shows a big drop, it may indicate the company is starting to have trouble paying its bills. Ongoing monitoring and watching trends can give you an early warning when a customer or supplier is starting to show financial distress, giving you more time to adjust your credit strategy.
Here’s an example. Let's say a potential customer applies for net-30 terms on a $15,000 order. You pull their D&B business credit report and see a PAYDEX score of 70, signally moderate risk territory, but it might not be enough to give you pause. But digging deeper, you see their score dropped 15 points from six month ago and there are two recent late payments flagged in their trade experiences, and a new public filing showing a tax lien. Individually, any one of these might not be a dealbreaker. Together, they paint a picture of a business that's starting to struggle financially.
So, what do you do? You have a few options, depending on how much of that $15,000 you can afford to risk. For example:
- Shortening the payment terms, maybe offer net-15 instead of net-30, to reduce the window of exposure.
- Approving the order with a lower credit limit, say $5,000, and revisit after a few successful payments.
- Requiring a partial upfront payment, covering a portion of the order before you ship.
- Declining credit and ask for prepayment instead.
Matching risk also needs to account for your personal tolerance levels.
What Else Shows Up in a D&B Business Credit Report?
Think of the PAYDEX score as an overall summary, but you can also find more detail to help you evaluate other businesses. For example:
- Business identification and D-U-N-S Number
- Trade payment experiences
- Credit limits and payment terms
- Public filings and legal events
- Financial stress and risk indicators
What’s a D-U-N-S number? It’s a nine-digit identifier assigned to each business, similar to a Social Security number but for companies.
How to Pull D&B Business Credit Reports Through Command Credit
Rather than signing up for a subscription service, you can pull on-demand D&B business credit reports with Command Credit. You can also access Experian, Equifax, and Credit Reports World. In some cases, you may want to look at multiple reports from credit bureaus for an more comprehensive assessment.
Command Credit makes it easy to pull business credit reports. Enter the name of the business and a few additional details, enter your payment information, and you can immediately download the report for viewing.
Get instant access to Dun & Bradstreet business credit reports without a long-term commitment.