In recent posts I’ve written about the database where Experian data resides and the matching engine that brings it together. Now, I’d like to write about one of the data elements that resides on the database and is seen on all of Experian’s commercial credit reports -- Days Beyond Terms (DB T). To many it’s simple and straight forward but if you have questions hopefully I can provide answers. So, let’s demystify DBT!
- Is DBT a credit score? No
- Do you need a table to translate the DBT? No
- Does DBT predict future performance? Possibly
- Is it a point in time indicator? Yes
The simple definition of DBT is the number of days beyond the invoice due date a business pays its bills. So, if a business is supposed to pay its bills within 30 days and the business pays on day 37, the DBT is 7. If a business pays before the invoice due date, the DBT is 0.
On Experian commercial credit reports, we aggregate the payment experiences from all trade payment suppliers in order to provide a DBT that’s reflective of all payment experiences. This DBT is the dollar-weighted average number of days beyond the invoice due date that a business pays its bills.
Experian also provides a DBT for select types of payment experiences such as newly reported (the first time a tradeline is reported to us) or continuously reported (a tradeline with atleast one update within the last 90 days). This will help determine if a business pays new suppliers better than others.
I hope this helps demystify the DBT. If you still have questions, comment on this post. If you have questions on another data element let me know as well. Your question just may be the topic for a future blog.