![]() This number denotes the creditworthiness of the company being rated, and is known as the PayQuo score. Only 5% of business in Equifax fall into this rangeĪll trade suppliers report severe past due or defaultĬlientChecker bills itself out as the “freelancer’s credit bureau,” and relies on the reports of users of its invoicing software in order to assign a numerical rating to a given business or corporation. How recent was the latest derogatory item (in months)Īmount of derogatory items as a % of dollars owed to suppliersĪll trade suppliers report payment within termsĪverage days to pay is slightly beyond termsĪverage days to pay is 10 to 20 days beyond termsĪverage days to pay is 20 to 30 days beyond termsĪverage days to pay is 30 to 40 days beyond terms Number of derogatory items in the past 2 years same quarter last year (difference in points) Number of payment references in the last 90 days Information has been reported to Equifax from the Bankruptcy Court OfficeĬredit Information Score is Figured Using the Following Chart: These scores attempt to predict the type of accounts most likely to be defaulted upon. Equifax also utilizes a unique “Commercial Score” system that separates “trade” credit from other credit (leases, etc.), based on the premise that business owners are more likely to meet real estate, lease, or banking lines of credit obligations over trade-related obligations. Along with the numeric code, Equifax delivers up to four “reason codes” that serve to indicate which factors more greatly affected the score. This score is numeric, between 101 and 992, with a lower score denoting a greater risk of delinquency. Selectively Defaulted on certain loans or creditĭefaulted – has defaulted on many obligations and S&P presumes this profile will default on most or all obligationsĮquifax provides a Small Business Credit Risk Score that intends to predict delinquency on financial accounts, and is designed for the financial services industry. In Bankruptcy and in the hands of Regulatory agency due to financial standing Very Speculative – May be in a state of arrears on some credit, or even in bankruptcy Highly Susceptible to financial environment – heavily dependent on favorable economic situation – Speculative prospect Vulnerable to financial environment – unsteady ![]() Much Less than Satisfactory – financial standing very unsteady – financial standing can be affected by the economy or market forcesĪ Less than Satisfactory rating – financial standing prone to be affected by the economy Good rating – financial standing can be affected by the economy or market forces.Ī Satisfactory rating. ![]() The Best rating – this denotes very stable, reliable companies.Ī Very Good rating – this denotes reliable companies with a bit more risk than AAA ![]() The credit watch may denote a potential upgrade, downgrade, or forecast some uncertainty. In addition, many times S&P will also offer an opinion or informed statement known by them as a “credit watch” that denotes whether there is an impending change in the rating. There are ratings between each letter grade that denotes position among that grade. Standard & Poor’s, also known as “S&P” rates companies on a scale from AAA through D, with an “NR” for companies that are too new or not yet rated. In addition to the Paydex score, D&B also utilizes a very simple 1 to 4 credit rating system. The Paydex system combines payment history, and current re-payment capabilities to assign a basic numerical score. D&B uses a multi-tiered approach to the rating of these businesses that involves a proprietary “Paydex” numerical scoring system for credit worthiness, along with a federal, and international government-recognized “D-U-N-S” system (Data Universal Numbering System) that is a very unique, and efficient, way to categorize a company. Dun & Bradstreet (D&B™)ĭ&B™ has a vast database of credit profiles on millions of companies–it is probably the most often referred-to organization when it comes to seeking business or corporate credit ratings. Although most of these agencies and organizations follow similar reporting and collecting guidelines, they all have unique, proprietary methodology that need to be considered. This is important so that the business owner might find ways to improve his corporation’s profile and thereby its creditworthiness and success. Once the business owner understands how important it is to establish and maintain a Corporate Credit Profile, it then becomes important to understand how this profile’s performance is rated and graded by the various reporting agencies.
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