How has COVID-19 impacted our scores and ratings?
Our scorecards use historical data to predict the future likelihood of slow payment and business failure to help businesses manage risk and make decisions e.g. extending credit. We know these decisions are tougher than ever in the current climate.
Our predictive scores use tangible factors like payment history and financial performance to assess the level of risk of doing business with a certain company, using data from over 30,000 sources. Key sources of data for our scores and ratings include company accounts, trade payment data, corporate linkage, Court information and events signaling the onset of failure.
COVID-19 and the furloughing of employees is having an impact on the availability of some source data such as company account filings and processing delays occurring with the courts. As a result, we expect a reduction in changes to scores and ratings until business transactions and official filings return to normal again. We are still obtaining data from other sources but we expect scores to change less frequently until the lockdown is over and business activity starts to return to normal again. Our data scientists are lending their skills and analytics capabilities to help organizations across both the public and private sectors. Our team of economists have adjusted ~70 country risk ratings since the virus took hold and continue to produce reports to support businesses operating on a global scale across multiple regions. During this time, we recommend that clients should use our scores alongside additional factors such as existing levels of exposure and known impacts of COVID-19 around current working practices when setting customer credit limits.
Changes to our score methodology could impact our clients and the businesses the scores relate to. We have made the decision not to change our existing scoring and credit limit models at present.
Scores will change as we receive updates through our data supply chain, and we will keep the situation under close review. Non–statistical events on individual businesses that cannot be accommodated in the automated scorecards can be subject to review, adjustment and override through our score review process. We are not changing our existing model for score overrides at this time. We will consider and action requests within the scope of our existing policy and normal course of business.
To complement our existing scoring models, we are developing a new COVID-19 Impact Index to support our clients. The Dun & Bradstreet COVID-19 Impact Index supplements Dun & Bradstreet’s risk scores and provides a view of the potential impact of the pandemic on a business’ operational activity, as well as its network of suppliers and customers.