In my last post I shared some insight on Experian’s Days Beyond Terms (DBT). Today, I’ll answer a question I received following that post – Why is there more than one DBT on a business credit report? The answer is different trade payment types may result in a different DBT. Let me explain what I mean to help pull it all together.

As you may recall, DBT is calculated from trade payment information received from suppliers. We then classify this information into three different categories – new, continuous and additional. 

• Continuous – trade payment information with at least one (1) update in the three (3) months
• New – trade payment information added within the last three (3) months with no previous updates
• Additional – trade payment information not updated within the last 3 months or non-trade accounts (ex: leasing and loans)

New and continuous tradelines provide a timely perspective on how a business is handling its current payment obligations. In addition, the distinction in tradeline type provides visibility into whether an applicant may be paying new vendors better or worse than the old vendors. Additional Payment experiences provide insight into past payment performance and recent experiences with nontrade accounts.

Experian calculates DBT for trade payment information classified as continuous and new. We also calculate a “combined DBT” which reflects the DBT of both continuous and new trade payment experiences. The DBT is available for the current month and historically through monthly and quarterly DBT trends to help identify timeliness of payment experiences over time.

I know that’s a lot of information, but I hope it it helped explain why a business may have more than one DBT. To see this information come to life a real business, check out the BusinessIQ Premier Profile.

As the summer heats up many of us are looking to take a break to enjoy our favorite summer activities.   While this break is well deserved (and essential for maintaining our sanity) it’s important to remember that the discipline around our credit decisions can’t take a break.  New applications still come in the door, products must be shipped and services must be performed   

This summer I am spending much of my “office time” working on a new credit report.  It’s my hope this report will help drive more informed decisions while freeing up your time to enjoy a well deserved summer break.   For years I’ve heard . . .

•  Do you have a fraud check right on the credit report?
• Do you have a credit limit recommendation on your credit report?
• How did the credit score look six months ago?
• What’s the NAICS code for this business?

Well, I’m happy to report we’ve listened!  The BusinessIQ Premier Profile answers all of those questions in one spot.  The report provides information needed to assess credit risk as well as the information to perform background checks.   Take a look and let me know what you think.  Will this report help you make more informed business decisions?  Did we free some time up for you to hit the beach or enjoy another fun summer activity?