Dun and Bradstreet reports feature three key components: credit ratings, percentage of payments within terms, and Paydex scores. Paydex scores are considered unique, dollar-weighted indicators that provide an instant overview of how a company has paid its bills in the past, and how that company is likely to pay its bills in the future. It's a very important score when it comes to being approved for business credit terms or financing.

The PAYDEX itself is a 1 to 100 dollar weighted numerical score of payment performance, calculated using up to 875 payment experiences from trade references reported to Dun and Bradstreet. A score of 80 is considered the perfect Paydex score. For example, if your payment terms to a vendor are 30 days net, then the 30th day after the billing the vendor has received your check on time. Scores above 80 mean that you actually pay ahead of the due date, while anything below an 80 means that you pay past the due date.

Weighted average is another crucial aspect of Paydex scores. They apply more importance to trades that are reporting a higher dollar amount of credit extended, and less importance to trades that are reporting lesser dollar amounts of credit. For example, if 10 trades for $100 each are reporting that your company pays 45 days late but one trade for $5,000 reports that you pay promptly, your Paydex score will still be good because the one $5,000 trade outweighs the 10, $100 dollar trades.

Weighted average works in reverse as well. If you make a bunch of trades and pay on time, though one trade for a higher amount is reporting your payment is 30 days late, then your Paydex score will be low. In essence, larger trades have a greater effect on raising or lowering one's overall Paydex score.