What is your Commercial CIBIL Report?

Here is all you need to know about your company’s credit report.
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4 mins read
18-Jul-2024

Commercial borrowers like firms and corporations need credit to keep their businesses running smoothly. However, before extending credit, lenders need to evaluate the creditworthiness of potential borrowers. In order to do so, they refer to the company’s commercial CIBIL report, just as they consult an individual’s CIBIL report to assess their reputation as a responsible borrower.

What is a commercial CIBIL report?

The commercial CIBIL report is a credit report compiled by TransUnion CIBIL. It provides insights into the creditworthiness of commercial borrowers. This comprehensive document details information on a company's credit facilities, payment history, credit enquiries, and credit utilisation. Thus, it plays a crucial role in the credit evaluation process for businesses, allowing lenders and financial institutions to make informed lending decisions and minimise their credit risk.

Features of commercial CIBIL report

The commercial CIBIL report offers the following features to lenders:

  • Access to the credit history of potential commercial borrowers.
  • Access the financial history of potential borrowers before making lending decisions.
  • Lowered risk of lending, enabling you to lend with confidence.
  • Faster credit disbursal.
  • Insights into the overall borrowings across different banks and credit institutions.

How to access the commercial CIBIL report?

Follow the step-by-step method below to access the commercial CIBIL report.

  • Visit the CIBIL website to get started.
  • Provide company information, including name, ID value, type, GSTN value, contact information, and address.
  • Submit and continue to the second step after agreeing to the terms and conditions.
  • Choose the mode of payment.
  • After completing payment, check your e-mail for the transaction ID and registration ID.
  • Share the necessary KYC documents
  • Receive the CIBIL rank and commercial CIBIL report at your registered address within a week.

Factors affecting commercial CIBIL report

The commercial CIBIL report is affected by the following factors:

  • Credit utilisation ratio: A higher credit-to-debt ratio negatively impacts a company's credit report as it signals a higher credit risk.
  • Credit history: Lenders look favourably upon a longer credit history as it indicates an established track record of good credit habits.
  • Outstanding debts: Managing external debts so they remain at a feasible amount is essential to maintain good credit health. 
  • Payment history: Paying EMIs on time is crucial to create a positive impact on the credit report.
  • Industrial sector: The risks associated with different sectors can vary and can impact a company's commercial CIBIL report accordingly.
  • Company profile: The company profile, including its size, nature of business, and revenue also impact its commercial CIBIL report. An older, well-established company with a good revenue stream is likely to have a better credit report compared to a newer organisation.

Best ways to improve your commercial CIBIL report

Follow these steps to improve your commercial CIBIL report:

  • Pay our dues on time to maintain a good repayment history.
  • Pay off your debts to ensure that you have only a feasible number of outstanding debts to keep your company's repayment ability in good standing.
  • Balance your assets and liabilities so that the latter never exceeds the former
  • Maintain a long history of responsible credit behaviour.
  • Ensure that your credit utilisation ratio is at 40% or lower.
  • Monitor your credit statements regularly to identify any issues or errors and then address and remedy them immediately.

Difference between Commercial CIBIL and Consumer CIBIL

Let's break down the key distinctions between Commercial CIBIL and Consumer CIBIL:

Category

Commercial CIBIL

Consumer CIBIL

Focus

Businesses

Individuals

Credit Report Type

Commercial Credit Report

CIBIL Credit Report

Score Range

1 - 10

300 - 900

Credit Modelling

CIBIL Credit Rank

CIBIL Credit Score

Data Used for Score Calculation

* Credit utilisation ratio * Credit rating * Industry's nature * Background of the company * Usage of credit limit * Repayment pattern * Loans availed * Accounts closed/active

* Credit card usage * Loan repayments * Credit inquiries

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Frequently asked questions

What is Commercial CIBIL?

The Commercial CIBIL Report is an exhaustive, multi-dimensional credit file with data of potential commercial borrowers. It works exactly like a CIBIL Report – it includes details of a company’s borrowings and repayments and helps lenders make informed decisions.

Commercial CIBIL Reports are offered to borrowers including public limited companies, private limited companies, partnership firms and proprietorships.

What is the difference between Commercial CIBIL and individual CIBIL?

Both consumer CIBIL Scores and Commercial CIBIL Rank are offered by TransUnion CIBIL, India’s largest credit rating agency. As the name suggests, an individual CIBIL score or a consumer CIBIL score refers to the score assigned to an individual consumer. It is a representation of an individual’s borrowing and repayment behaviour and is used by lenders to assess the person’s credit worthiness. It is denoted by a three-digit score in the range of 300 and 900.

Commercial CIBIL is offered to companies or organisations after studying their financials, credit history, and credit utilization. This is denoted as a rank between 1 and 10.

How can I correct my Commercial CIBIL score?

Your Commercial CIBIL Report or the CIBIL Company Credit Information Report (CCR) includes details such as your address, contact information, and other relevant information. If you find that your details are inaccurate or need updating, you may raise a dispute by visiting the CIBIL website and submitting an online dispute request. The online dispute resolution process is easy. If your request is accepted, it takes up to 30 days to reflect on the official records.

What is the best Commercial CIBIL rank?

Your Commercial CIBIL Rank (CCR) is a representation of your company’s creditworthiness. It is denoted by a numerical value between 1 and 10 (1 being the best and 10 the worst). 1 is the best possible rank, provided to businesses that have exposure to credit of Rs. 10 lakh to Rs. 10 crore. A rank of 1 or closer to 1 improves the possibility of you securing a commercial loan.

Who can access commercial credit reports?

Commercial credit reports are typically accessed by entities with a legitimate business need. This includes lenders (banks) evaluating loan applications, vendors assessing creditworthiness before extending trade credit, and businesses performing due diligence before partnerships or mergers.

Who uses commercial credit?

Businesses of all sizes utilise commercial credit. From startups needing capital for inventory to established companies financing expansion projects, commercial credit offers flexible funding options.

What are the benefits of commercial credit?

Commercial credit offers several advantages. It helps businesses manage cash flow by financing purchases or expenses without depleting reserves. It can also fund growth initiatives or bridge temporary financial gaps. Additionally, a strong commercial credit history can unlock better loan terms and interest rates.

What is a CMR score in commercial CIBIL?

The CMR (CIBIL MSME Rank) is a creditworthiness ranking for Micro, Small and Medium Enterprises (MSMEs) in India. It helps lenders assess the risk of an MSME defaulting on a loan. A lower CMR (1-3) indicates a strong credit history, while a higher CMR (8-10) suggests a higher risk of default.

What is the full form of CMR?

CMR stands for "CIBIL MSME Rank".

What does CMR 1 to 10 mean?

The CMR is a rank on a scale of 1 to 10, with 1 being the best and 10 being the worst. A lower CMR signifies a better credit history and a lower chance of loan default.

How can I improve my commercial CIBIL score?

You can improve your credit health by consistently repaying existing loans on time, maintaining a low debt-to-equity ratio, and managing credit utilisation efficiently.

Who uses commercial credit?

Businesses of all sizes use commercial credit, from obtaining loans for equipment or inventory to financing real estate purchases.

What is a commercial credit rating?

A commercial credit rating is a similar concept to a CMR, but it can be issued by various credit rating agencies in India and may use a different scale. Both assess a business's creditworthiness and predict the likelihood of loan repayment.

What are the 4 Cs of commercial credit?

The 4 Cs of commercial credit are Character, Capacity, Capital, and Collateral. These factors are used by lenders to evaluate a business's creditworthiness and determine loan eligibility.

What is commercial credit risk?

Commercial credit risk is the chance that a business borrower will default on a loan. Lenders use a CMR, credit ratings, and other financial assessments to measure this risk.

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