How to navigate and improve your Dun & Bradstreet business credit report

For businesses, one of the big credit reporting agencies is Dun & Bradstreet, as their PAYDEX score of your company can be the reason why your business gets credit – or it doesn’t. You need to keep on top of your PAYDEX score, as with all of your other business credit scores. D & B provides a sample report and even some higher level guidance in how to interpret it. Here, we’ll go over the sections in turn.

Sample D & B Report

Header

As you might expect, this is basic identifying data such as company name and address, and the date of the report.

Executive summary

Here, D & B includes company founding date and the number of employees. This section includes working capital, sales, and net worth.

D & B rating

The report shows two graphs:

• Financial strength
• Composite credit appraisal

The report defines the terms next to the graphs.

D & B PAYDEX

Here the report shows two more graphs:

• Up to 24 months D & B PAYDEX – this shows when your company pays its debts and compares that to the industry average. Payment dates are divided into greater than 120 days slow; 30 days slow; prompt; and anticipates. Naturally, you want your business to be somewhere between prompt and anticipates.
• Up to 3 months D & B PAYDEX – this shows the same data and the same divides although there is no comparison to the industry average.

Predictive analytics

Here are two more graphs:

• Financial stress class – compares failure rates to similarly stressed companies.
• Credit score class – compares payment dates to similar companies to show delinquency percentages.

Credit limit recommendation

This graph divides risk category into high, medium, and low.

D & B viability rating

This rather more complex graph shows the following:

• Viability score – from high risk to low risk.
• Portfolio comparison – from high risk to low risk.
• Data depth indicator – from descriptive to predictive (this measures how much information D & B is basing its report on).
• Company profile – this includes:

- Financial data – whether available.

- Trade payments – whether available.

- Company size – such as large.

- Years in business – such as ‘established’.

Business information

Business summary

This section includes Standard Industrial Classification (SIC Codes) and North American Industry Classification System (NAICS Codes).

Credit capacity summary

There are two graphs:

• Financial strength – shows cash amounts.
• Composite credit appraisal – divides into limited, fair, good, and high.

This portion also includes the prior D & B rating and recent payment activity, including average high credit, highest credit, and total highest credit.

D & B viability rating

This is another complex section. Fortunately, Dun & Bradstreet provides definitions next to the four graphs:

• Viability score – high risk to low risk, compared to all businesses in the D & B database.
• Portfolio comparison – high risk to low risk, compared to all businesses in the same model segment.
• Data depth indicator – a measure of how much information D & B has to go on, in their database.
• Company profile – very basic data on company size and years in business.

Business history

This part includes narrative information about the company, including the name(s) of its officer(s) and director(s), along with any affiliate information, if applicable.

Business registration

In this part, the report goes into where the business incorporated and the date of incorporation along with the corporate registration ID.

Government activity summary

This section is mainly about whether the business might be considered for socioeconomic programs, such as whether it is minority-owned or is considered a small business.

Operations data

The part provides basic company information like the business you are in, the net payment terms you have with creditors, number of employees, the type of facilities you have, and where the facilities are (e. g. within a business district or the like).

Industry data

This section defines the SIC and NAICS codes for your company.

Family tree

Branches domestic

Your main branch is listed here; if you only have one office, then it’s here.

Subsidiaries domestic

If your company has any subsidiary offices, they are listed here.

Financial statements

Three years comparative statement

This section compares several data points for the past three years, such as current assets and liabilities.

Key business ratios

Here, the report compares your company to the industry median and the industry quartile when it comes to particular data points, such as short term solvency and assets sales.

Most recent financial statement

This section shows detail on current assets, non-current assets, current liabilities, and non-current liabilities.

Indicators

Public filings summary

This section summarizes the number of judgments, liens, suits, and UCC filings your company has.

Public filings

This section presents a bar chart based on the previous section.

Full filings

Judgments

Here are the details on any judgments against your company.

Liens

Here are the details on any liens against your company.

UCC filings

Here are the details on any UCC filings impacting your company.

Commercial credit score

Summary

Here the report shows a graph from high to average to low for your company’s credit risk.

Incidence of delinquent payment

This section compares your company’s delinquent payment history to similar companies.

Credit score percentile norms comparison

This section graphs your company’s credit score versus similar companies.

Financial stress score

Summary

This graph shows your company’s financial stress class from high to average, to low.

Financial stress score percentile

This section shows the probability of failure of your business.

Financial stress percentile comparison

This section graphs your company’s financial stress percentile versus similar companies.

Advanced PAYDEX + CLR

D & B PAYDEX

There are two graphs in this section:

• Up to 3 month D & B PAYDEX – Payment dates are divided into greater than 120 days slow; 30 days slow; prompt; and anticipates.
• Up to 24 month D & B PAYDEX – this graph shows the same scale.

Credit limit recommendation

This graph divides your business’s risk category into high, moderate, or low.

PAYDEX yearly trend

This line graph shows your company’s PAYDEX scores compared to the primary industry for the last four quarters.

Payment habits

Here the report shows your business’s percentage of payment within terms divided by various dollar ranges.

Payment summary

The section provides some detail on the payment experiences D & B has on file for your business. This shows how quickly your company paid off its debts, how much credit was extended, etc.

Detailed payment history

This section expands upon the previous one by adding report dates, paying records, selling terms, and the like.

Get your own D & B PAYDEX report

You are going to have to look at your own PAYDEX report in order to get a handle on your company’s financial health. You can get your PAYDEX report here and you can contact their Customer Service department (it’s a part of Dun & Bradstreet, as they also generate PAYDEX reports) here. D & B’s PAYDEX Customer Service phone number is here.

Improving your D & B PAYDEX report

Now that you know what goes into it, the main areas that Dun & Bradstreet reports on are delinquencies amounts and time frames, amount of credit utilized, business history (e. g. time in business), and judgments and liens. By keeping your credit utilization within reason (less than 30% of your total available credit is best), clearing your debts as fast as possible and avoiding delinquency and late payments, and also accumulating some time in business, you should be able to improve your D & B PAYDEX score over time.

We can help.