Let's begin by temporarily talking about your individual credit rating and the FICO rating system. Your credit rating is connected to you through details such as your social security number, full name and the date you were born. Your individual rating is determined by this system and varies from 300 to 850. The greater the rating the more likely you are to be approved for credit.
A PAYDEX credit rating is a business credit rating which varies from 0 to 100. A unique number referred to as a DUNS number is used to track a PAYDEX rating. A DUNS number may be generated instantly when credit information about your business is reported but you can also receive one by request. As with the FICO system, the greater the rating the more likely you are to be approved for credit.
Now that you know what a PAYDEX is, you can start to understand how it is measured. If you were to establish a credit relationship with a company and the company which extended you credit reported the details, it would affect your PAYDEX rating. For example, if you were to continually pay exactly on the day which the money was due, you would likely have a PAYDEX rating of 80.
A PAYDEX rating of 80 means you've met the conditions of your credit obligations. If you were to continually pay two days later than the due date, you would probably have a rating of 79. If you were to continually pay two days prior to the due date, you would probably have a rating of 81. So I'm sure you get the general idea of how this works. To obtain the highest PAYDEX rating (which is 100), you must pay a month prior to the due date. However, a rating of 80 is considered to be a favorable credit score since it shows that you do not make late payments.
There are free business credit building programs which will show you how to get a DUNS number setup so you can begin to build a credit rating. Usually these programs explain how you can ensure that your company credit rating is being measured correctly and therefore affecting your business credit rating. After you have finished most reputable business credit building programs and correctly completed all of the tasks described within the system, your company will usually have a PAYDEX rating of 80 or greater.