Dun & Bradstreet Failure Score

Making good credit decisions is not always easy. To measure and assess risks objectively and consistently, you need a variety of information. The D&B Bankruptcy Score makes risks visible and measurable and is based on the largest possible number of company data. Its calculation method guarantees objectivity and consistency and enables you to reduce bad debt.

Rating & Scores

D&B Failure Score

Making good credit decisions is not always easy. To measure and assess risks objectively and consistently, you need a variety of information. The D&B Bankruptcy Score makes risks visible and measurable and is based on the largest possible number of company data. Its calculation method guarantees objectivity and consistency and enables you to reduce bad debt.

The D&B Failure Score is:

  • A dynamic risk indicator of the probability that a company will cease its activities within 12 months.
  • A statistically determined and mathematically calculated score according to the rules of the art that predicts business failures.
  • A refinement of the D&B Rating, for credit decisions that require a more in-depth analysis, a percentile score on a scale of 1 to 100 that positions a company against all other companies in the D&B database.
  • A score available for all companies (including companies that do not publish financial accounts) in 24 European countries.

Quick and easy to interpret

The D&B Bankruptcy Score is a predictive indicator for corporate insolvencies. The D&B Bankruptcy Score refines the risk scale from 1 to 4 of the D&B Rating to a scale from 1 to 100. The higher the D&B Bankruptcy Score, the better the status of the D&B Rating. company and the less likely it is that this company will cease its activities within the next 12 months.

The calculation of the D&B Bankruptcy Score

A team of D&B specialists has succeeded in identifying, by means of modern statistical scoring techniques, the data elements that determine the success or failure of a company. It is these data elements that are used in the calculation of the D&B Rating and the D&B Bankruptcy Score. These are not just financial data! After the identification of the predictive data elements, a number of “points” are assigned to each element. In order to improve comparability, this number of points is then converted to a scale of 1 to 100 (percentile score).

The D&B Bankruptcy scores are recalculated daily. Every six months, the Score Model is evaluated for effectiveness and adjusted if necessary. The D&B Bankruptcy Score is country-specific: a score was developed for each country on the basis of the available data in that country.

The advantages of the D&B Bankruptcy Score

  • Faster decision making – by basing your credit decisions on the D&B Bankruptcy Score, you can effectively reduce the time required to process applications.
  • Better decisions and reduced exposure to non-recoverable debt – the finer scale of the D&B Bankruptcy Score allows you to make more accurate decisions and thus better protect yourself from badly paying customers.
  • Increased efficiency and productivity – By automating the easy or standard applications (about 70% of all credit decisions!) you can focus your attention and time on investigating the more difficult cases.
  • More consistent and objective credit decisions – By using the D&B Bankruptcy Score for your credit decisions, you can improve the consistency and objectivity within the decision-making processes.
  • Effective management of your portfolio – The D&B Bankruptcy Score makes the risk visible and measurable. This enables you to better assess, map and manage the individual and global risk of your debtor base.

Automation on the basis of the D&B Bankruptcy score

Thanks to its predictive power, the D&B Bankruptcy Score can play a central role within automated decision systems. Credit decisions are made automatically by splitting the 1 to 100 scale of the D&B Bankruptcy Score into the categories “accept, refuse and/or refer back”. In addition, the D&B Bankruptcy Score can also be integrated into the company’s own credit policy.

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