What Is A D&B Rating? Types, Definitions & More

Posted by: John S Kiernan

D&B ratings, short for Dun & Bradstreet ratings, are a type of credit score for small businesses. They measure how risky it is to do business with a certain company. Dun and Bradstreet is one of three major small business credit reporting agencies, the others being Equifax and Experian. Business credit scores are not as reliable or used as often as personal credit scores. But they’re worth looking into if you own a business, whether it’s to assess your own company’s status or to check up on a potential business partner.

With that in mind, D&B actually offers several different types of small business credit scores. You can get to know them below.

Types of D&B Credit Ratings

Type of D&B Score	What It Measures	Min. Score	Max. Score	What’s Good?
D&B Credit Rating*	Overall business risk	HH 4	5A 1	2 (letters reflect net worth)
PAYDEX	Speed of payment	1	100	70+
Delinquency Predictor	Likelihood of non-payment	5	1	2
Supplier Evaluation Risk Rating	12-month survival odds	9	1	5
Financial Stress Score	Pressure on a company’s balance sheet	5	1	2
Credit Limit Recommendation	Borrowing capacity	$0	N/A	N/A

* If a regular rating cannot be given, D&B will assign an Extended Credit Appraisal Score based upon the number of employees, or an Alternative Rating based on whatever information it has. We cannot assign a “good” value to the letter portion of a D&B Credit Rating because it represents net worth. A business can be stable at any level of net worth.

Although business credit scoring is, well, big business, your personal credit standing actually tends to be far more important to your ability to borrow as a small business owner. So it’s in the best interest of your company to make sure you reach Top WalletFitness® personally. And the first step is to check your latest credit score, which you can do for free on WalletHub.

Check Your Latest Credit Score – 100% Free

But it’s still a good idea to stay on top of your business credit, too. It will come into play at some point, after all. So here’s what else you should know about each type of D&B credit score.

In Depth: Dun & Bradstreet Credit Ratings

1. D&B Credit Ratings measures how risky it is to do business with a certain company. D&B refers to this score as “the heart of the information contained in a Business Information Report.”

   Each D&B Credit Rating consists of two parts:

   • Financial Strength Indicator – The highest score of 5A means a business has a worth of $60+ million. HH, the lowest Financial Strength Indicator, indicates that a business is worth 15,000 or less.

     This part of the rating is based on a company’s net worth, when available, or issued capital (the value of the company’s shares).

   • Condition Code/Risk Indicator. This measures the risk of the business failing, from 1, “minimal,” to 4, “significant.”

   If the information to give a full credit rating is not available or applicable, D&B instead assigns an Extended Credit Appraisal Score based upon the number of employees. If this information is also not available, D&B gives an Alternative Rating based on whatever information it has.

   If you have a high D&B Credit Rating, creditors will feel less nervous about extending lines of credit to you, because your business is going strong and has the ability to pay them back.

2. PAYDEX – This type of score measures how promptly a business paid its bills, ranging from 100, anticipating payment in advance, to 1, being 120 days behind. According to D&B, paying larger bills may have more of an impact than smaller bills. D&B considers any score of 70 or above to be good, but 80 is ideal as it represents “prompt” payment.

   Having a good PAYDEX score could help you win new business and contracts. Both businesses and creditors are more willing to engage with others who have a proven record of paying on time. Higher scores can also get you better terms.

3. Delinquency Predictor – Just as it sounds, it measures of how likely a business is to be delinquent on payments. A score of 1 means a low likelihood, while 5 means a high chance. The score is based on your payment history, along with demographic information and any lawsuits or liens against you.

   A good Delinquency Predictor Score means that you’re likely to get higher credit limits from companies who view it. They’ll be confident in your ability to repay them.

4. Financial Stress Score – This is a measurement that says how likely a business is to have “stress” or “failure,” for example, bankruptcy, in the next year. It ranges from 1, “low risk,” to 5, “high risk.” The factors used to determine this are the same as those for the Delinquency Predictor, but weighted differently.

   This score is helpful for warning creditors about extreme situations. Businesses that received a low score likely stopped operations after a bankruptcy, caused a loss to creditors, withdrew from a deal and didn’t make an agreed payment, or is undergoing changes in company structure. Based upon this history, creditors may not want to do business.

5. Supplier Evaluation Risk Rating (also referred to as the Viability Rating) – A measure of how likely a company is to go out of business in the next year. A rating of 1 means “low risk,” while 9 signifies “high risk.” This score is based on the same factors as your Delinquency Predictor and Financial Stress Scores, just with different weightings.

   High scores in this category can get you better long-term business deals. If you’re projected to keep supplying, more businesses will want to make contracts with you. According to the U.S. Small Business Administration , one third of businesses fail in the first two years, and half within five years. Partners want to know you’ll beat those odds.

6. Credit Limit Recommendation – The last type is less of a direct “score” than the others, and is the dollar amount D&B recommends that creditors should extend to you. This prevents both creditors from offering money they won’t get back and you from taking too much credit and going into debt.

How Much Do D&B Scores Cost?

How much you have to pay depends on whether you’re monitoring yourself or another business. D&B has several different tiers that they sell on their website.

Monitoring Your Own Business

D&B Ratings Package	Monthly Cost	Ratings / Scores Included	Notable Benefits
CreditSignal®	$0	None (only alerted when any score changes)	Alert when your file is changed or purchased Monthly summary
CreditBuilder™ Plus	$159	PAYDEX Credit Limit Recommendation Supplier Evaluation Risk Rating D&B Rating Financial Stress Score Delinquency Predictor	All CreditSignal® benefits Unlimited access to D&B scores Ability to add positive experiences to your own file Comparison to 8 companies & industry benchmarks Business Advantage Plus access (legal forms and alerts)
CreditBuilder™ Premium	$199	PAYDEX Credit Limit Recommendation Supplier Evaluation Risk Rating D&B Rating Financial Stress Score Delinquency Predictor	All CreditBuilder™ Plus benefits Comparison to a larger number of businesses
Credibility Concierge®	Varies by customer	PAYDEX Credit Limit Recommendation Supplier Evaluation Risk Rating D&B Rating Financial Stress Score Delinquency Predictor	All CreditBuilder™ Premium benefits Specialist updates file and disputes inaccuracies One-on-one consultations Business Information Report™ on another company

Monitoring Other Businesses

D&B Ratings Package	Annual Cost	Ratings / Scores Included	Number of Companies Included	Notable Benefits
Credit Evaluator Plus™	$61.99	PAYDEX Credit Limit Recommendation	1	See company’s legal filings Comparison to industry trends
Business Information Report™	$121.99	PAYDEX Credit Limit Recommendation Supplier Evaluation Risk Rating D&B Rating	1	All Credit Evaluator Plus™ benefits In-depth info on the business’s owners, employees, finances & more
Credit Advisor™	$188	PAYDEX Credit Limit Recommendation Supplier Evaluation Risk Rating D&B Rating Financial Stress Score Delinquency Predictor	1	All Business Information Report™ benefits 24/7 monitoring of company’s file Alerts on changes in the file Access to D&B’s listing of financial statements Archive your data
Credit Reporter Plus™	$799	PAYDEX Credit Limit Recommendation Supplier Evaluation Risk Rating D&B Rating Financial Stress Score Delinquency Predictor	5	All Credit Advisor™ benefits Access to Overall Business Risk Assessment

For more information on small business credit reports and scores, check out WalletHub’s guide.

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