What is business 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 that need to be made to get started? Most businesses don’t know what I’m talking about, but we show you the credible way to get started.

The primary 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 pay the terms of the credit or loan similar to the FICO score for personal credit.

Paydex scores range from 0 to 100. The higher the score, the better the credit for your business. The score is based on how well the company pays the debt and the promptness of the payment to the suppliers within the established period to pay the debt.

Most lenders look for a score of 70 or higher, but for best results you should have at least a Paydex score of 80. Let me show you how the Paydex score is created.

payment expectation

The expected payment can arrive before 100

Payments generally come within the 90 cash discount period

Payment is on time 80

Payment arrives in 14 days beyond the terms 70

Payment arrives in 21 days beyond 60 terms

Payment arrives in 30 days beyond the terms 50

Payment arrives in 60 days beyond the terms 40

Payment arrives in 90 days beyond the terms 30

Payment arrives in 120 days beyond the terms 20

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If you’re in business, having a high Paydex score and establishing new credit is essential to continue building your business credit to help you earn limits that could exceed $100,000.

It should only take about 60 days to get a great Paydex score. This is very easy to do and you should start by getting a DUNS number which is the equivalent of a Dun & Bradstreet social security number.

Once 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 for your business credit reports, specifically for 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 promptly 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.