Changes to a Business’s Delinquency Predictor Score

What Is the Delinquency Predictor Score?

The D&B Delinquency Predictor Score predicts the likelihood that a company will pay in a severely delinquent manner, seek legal relief from creditors, or cease operations without paying all creditors in full during the next 12 months based on information in the Dun & Bradstreet Data Cloud. A severely delinquent company is defined as a business with at least 10% of its payments more than 90 days past due.

The areas of information used in the D&B Delinquency Score include:

• Trade Experiences collected through the D&B Trade Programme – Businesses regularly provide their experiences of the payment habits of businesses they are trading with.  Payment trends and volatility will affect Scores in addition to percentages of prompt or late payments
• Public detrimental information - Such as County Court Judgements (CCJs), mortgages / charges and the legal pre-failure events (administration, receivership, bankruptcy, etc)
• Demographics – Including business age, location, line of business and corporate linkage (especially when there is risk within the group)
• Principals – The principal’s experience and performance of associated businesses
• Financial – Ratios and trends taken from annual and interim accounts.  Factors assessed include liquidity, solvency, profitability, debt, late filing and detrimental notes

The D&B Delinquency Score is dynamic, meaning that it is recalculated every time we collect a new piece of information about an organisation, or when information changes.  For example, as the age of an organisation increases, its risk typically decreases and our Scores will change to reflect this.

Interpreting the D&B Delinquency Score

Our Delinquency Score is a relative measure of risk, whereby 1 represents organisations that have the highest probability of delinquency and 100 the lowest. It shows how an organisation’s risk of delinquency compares to other organisations within a country by ordering and segmenting that country’s database into 100 equal percentiles. Each Delinquency Score represents 1% of organisations within that country with the same risk of delinquency. Therefore we can say:

• A score of 25 means a business falls into the bottom 25% of UK organisations
• A score of 64 means that 36% of UK organisations have a lower risk of delinquency.  It also means that 64% of UK organisations have the same or higher risk.

Read more here.