While the two may sound similar, Consumer CIBIL and Commercial CIBIL serve different purposes for individuals and businesses. In fact, they could have varying implications for either type of entities. Read on to learn more about the difference between the two:
What is Consumer CIBIL Score?
Consumer CIBIL is a credit information report that helps lenders evaluate the creditworthiness of an individual. It provides information on an individual's credit history, such as credit card usage, loan repayments, and other financial obligations.
Based on this information, lenders can determine the individual's credit score, which is a three-digit number that ranges from 300 to 900. A higher score indicates that the individual is more creditworthy and is likely to repay loans on time.
Consumer CIBIL is essential for individuals who want to apply for loans or credit cards. The CIBIL Score helps lenders decide whether to approve or reject the loan application. A good credit score can also help individuals negotiate better loan terms, such as lower interest rates and longer repayment periods.
To maintain a good credit score, individuals must ensure that they make timely payments on their loans and credit card bills. Late payments can negatively impact the credit score and make it difficult to secure loans in the future.
It is also important to avoid defaulting on loans, as this can severely damage the credit score and make it challenging to secure credit for several years.
What is Commercial CIBIL Report?
Commercial CIBIL, on the other hand, is a credit information report that helps lenders understand the creditworthiness of a business. The report provides details on the business' credit history. These details may include how payments are made, unsettled debts, and financial obligations.
Based on the details in the CIBIL report, lenders can gauge the business's credit score or rank, which ranges from 1 to 10. A higher score is a clear indicator that the business is more creditworthy and is likely to pay off loans on time.
Commercial CIBIL is crucial for businesses that want to apply for loans or credit lines. Lenders use this report to assess the business's creditworthiness and decide whether to approve or reject the loan application. With a good credit score, businesses can negotiate favourable loan terms, such as lower interest rates and longer repayment periods.
Businesses need to maintain a good CIBIL Rank. To do so, they should settle their loans and other financial obligations on time. If you are a business owner, you will need funds to manage the varying needs of your business. Delays in loan payments can negatively impact your CIBIL Rank.
It will become difficult to secure loans in the future if your CIBIL Rank comes down. Also, try not to default on loans. Defaulting on loans can have a severe impact on your CIBIL Rank and make it difficult for you to get credit for years.
Key differences between consumer CIBIL and commercial CIBIL
While both consumer and commercial CIBIL serve the same purpose of evaluating creditworthiness, they differ in several ways. The main differences between the two are:
Parameters |
Consumer Bureau |
Commercial Bureau |
Used for |
Individuals |
Businesses |
CIBIL credit modelling |
CIBIL Credit Score |
CIBIL Credit Rank |
Credit scoring range |
Ranges from 300 to 900 |
Ranges from 1 to 10 |
Type of credit report |
CIBIL credit report |
Commercial credit report |
How is your score/ rank calculated |
Number of active accounts Number of old/ closed accounts Number of loans Number of credit cards Repayment pattern Assigned credit limit usage |
Company background Nature of industry Credit history Credit utilisation ratio |
Credit score range
Consumer CIBIL uses a credit score range of 300 to 900, while commercial CIBIL uses a credit score range of 1 to 10. This is because the credit profiles of individuals and businesses are different, and their credit scores are calculated using different parameters.
Credit history
Consumer CIBIL focuses on an individual's credit history. The credit history covers details such as credit card usage, debt repayments, and other monetary obligations. Commercial CIBIL, on the other hand, focuses on a business's credit history. For a business, the credit history will include debt repayment history, payment behaviour, unpaid invoices, and other financial obligations.
Purpose
Consumer CIBIL is used to determine the likelihood of the individual repaying loans on time. Commercial CIBIL, on the other hand, is used to determine whether the business has the capability to repay loans on time.
To conclude, understanding the difference between consumer CIBIL and commercial CIBIL is essential to navigate the world of credit and finances. Individuals and businesses both have to repay their loans and settle their other financial obligations on time to maintain a good credit score. With a good credit score, individuals and businesses can negotiate better loan terms and secure credit when they need it the most.
Bajaj Finserv presently offers individual consumers the facility to check their CIBIL Score for free. Share a few basic details on the ‘Check’ CIBIL Score page of the website to see your CIBIL Score.
And that is not all. You can also access your personalised credit dashboard and get a host of attractive offers by subscribing to India’s first Credit Pass subscription, powered by CIBIL.
