Delinquency ScoreHelping you to Decide With Confidence

 

We provide Scores and Ratings to help our customers identify organisations that are likely to fail or pay late, or will want to purchase their goods / services. This helps our customers drive growth and increase profitability by:

  • Allowing automated decisions for increased efficiency, which will free up valuable resources to focus on more important decisions

  • Enabling more consistent decisions across the entire organisation

  • Applying scores across an entire portfolio to quickly identify risk and opportunity

  • Allowing faster processing of large volumes of transactions

     

Delinquency Score – Manage Your Cashflow

Our Delinquency Score predicts the likelihood that an organisation will pay its bills in a severely delinquent manner over the next 12 months. “Delinquency” is defined as an organisation that, according to Trade Experiences collected by D&B, has paid less than 75% of Trade Experiences within terms and more than 10% paid 90+ days late.

The Delinquency Score identifies the organisations that are likely to pay late and helps our customers to manage their cash flow.  Having cash or liquid resources available to meet daily working capital requirements is fundamental to the survival of all organisations.

 

Transforming Information into Insight

Factual information is analysed using advanced statistical modelling techniques (including Logistic Regression, Discriminant and Segmentation Analysis) and commercial expertise to identify data characteristics that are common to and most predictive of delinquency. These characteristics are then weighed by significance to form rules for our scorecards that differentiate between organisations with a high risk of delinquency to those with a low risk. 

 

To calculate the D&B Delinquency score, some or all of the below areas of information are used, but not all are required in order to generate the score: 

  • 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

Note: All companies with a Delinquency Score will contain Demographics information.

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.

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UK Delinquency Score Disclaimer

The D&B Delinquency Score seeks to predict the likelihood that a business will pay its bills in a severely late manner in the next year. This score may be based on, but not limited to, data elements such as industry type, trade payment data, and/or financial data.  Other data elements taken into account include, for example, bankruptcy and receivership. Scores may be extrapolated, based on analytics, from such data.

In some instances, not all data elements are available to us. In those instances, proxy elements with similar predictive power may be used to substitute for absent data elements. For this reason, a Delinquency Score will be generated in the absence of trade payment data, where we have determined a that a valid score can be generated based on a proxy or proxy elements. 

Our Credit Ratings are statements of opinion as of the date they are expressed and are not statements of current or historical fact or recommendations. 

Please read the full disclaimer.