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What is Business Credit? Business credit is established in the name of the business and is based solely on the credibility of the company. But do you know what are the things needed to get started? Do you know the building blocks to get started? Most of the companies are clueless about what I am talking about but let us show you how to get started in a reliable way.
The principle FICO rating used as a part of the business world is known as the Paydex score given by Dun & Bradstreet.
This number reflects the riskiness of a business’s ability to pay back credit or loan terms, similar to a FICO score for personal credit.
The Paydex score ranges from 0-100. The higher the score, the better the credit standing for your company. The score is based on how the company repays the loan and the promptness of the payments to the suppliers within the time frame given to repay the loan.
Most lenders are looking for a score of 70 or higher but for best results, you should have a PEDEX score of at least 80. Let me show you how to create a Paydex score.
payment expectation
Expected payoff may come in early 100s
Payments are usually due within the initial payment grace period of 90
payment is prompt 80
Payment is due in 14 days beyond 70 terms
Payment is due in 21 days beyond 60 terms
Payment is due in 30 days beyond 50 terms
Payment is due in 60 days beyond 40 terms
Payment is due in 90 days beyond 30 terms
Payment is due in 120 days beyond 20 terms
Unavailable UN
If you are in business it is essential to have a high Paydex score and establish new credit to continue building your business credit to help you achieve the $100,000 plus limit.
It should only take about 60 days to get an excellent Paydex score. This is very easy to do and you should start by getting a DUNS number which is the equivalent of a Social Security number from Dun & Bradstreet.
Once you have your DUNS number, your next goal is to begin requesting 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 find that Paydex score on your business credit report, specifically Dun & Bradstreet, Business Experian and Equifax.
Your goal is to obtain credit from various creditors, use that credit regularly to help your company continue to increase its score. Make sure you make your payments promptly and on time to make sure your Paydex score stays above 80 for optimal results.
As you continue to make your payments on time, it will become easier to obtain business name credit.
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