Commercial CIBIL Report and its Important for Your Business

We frequently come across CIBIL credit scores for individuals, if you are operating a company or firm, the tables are completely different. CIBIL generates a credit information report (CIR) and an individual’s credit score. CIBIL generates a company credit report (CCR) for commercial borrowers like businesses and firms.

What is CIBIL commercial report? 

A CIBIL commercial report emphasizes a company’s creditworthiness in the same way that a CIBIL score indicates an individual’s creditworthiness. In light of the data gathered by the banks and other financial institutions, a CIBIL commercial report is a thorough analysis that is also widely used to assess a company’s creditworthiness when it applies for a business loan. 

The following details are included in a CIBIL commercial report: 

Background of the company: Information about the company’s history, including its legal structure, subsidiaries, owners, and years of existence. 

Financial Information: A company’s ability to borrow money is based on its financial situation. 

Financial history: Financial information about the repayments, collections, income generation, and other aspects of the company’s financial history. The CIBIL rank is another important factor apart from these that is similar to the CIBIL score. It provides a numerical summary of the company’s CRR. A CRR ranges from 1 to 10, with 1 being the highest possible rank, just as a  CIBIL score ranges from 300 to 900. Only businesses with credit exposure between 10 lakhs to 10 crores get this rank.

How to obtain Commercial Business Report 

You can obtain your company’s commercial report from the official CIBIL website. To access your CCR, it must be noted that you have to pay a subscription fee of Rs. 3,000. 

Below are the steps to obtain your CCR: 

Step 1: Visit the official website at cibil.com/online/Company-credit-report.do.

Step 2: At this step, you must complete the application form with the necessary details, including the company’s legal constitution and registered address, the applicant’s name and address, the applicant’s contact information, the applicant’s PAN and other information, and other relevant information. 

Step 3: Next, select payment method from the available online alternatives.

Step 4: CIBIL will assign your application a unique Registration ID and Transaction ID, which will be mailed to your registered email ID once the payment is made. 

Step 5: Now, upload your KYC paperwork. You will receive your CCR and CIBIL rank at the company’s registered address within 7 days. 

Factors Affecting Company Commercial Report

Credit history: A company’s length of credit has a significant impact on its CCR. The better it is for your company’s commercial report, the longer the credit history. 

Credit to Debt Ratio: A company’s credit utilization rate is determined by the credit to debt ratio. A higher credit utilization indicates that a business is using its borrowed money more quickly than anticipated. This may negatively affect the CCR. 

Previous History: To meet the daily expenditures, every company requires operation funds. These funds are obtained through loans that require EMI payments. EMI payments should be made on time by both individuals and businesses, as this is an indicator of financial health. 

External Debts: While credit institutions take the outstanding balance into account, external debts, or the amount of debt, can negatively affect a company’s CCR. So, it’s crucial to retain only manageable amounts outstanding. 

Profile of the company: This includes the company’s size and its history. Compared to new businesses and startups, older and larger corporations are seen as having a more solid and well-established financial history, which lends them greater credibility. 

Industrial Sector: Certain areas of the economy are more risky and have an effect on CCRs for businesses. For instance, your business will be viewed as less creditworthy than businesses in more stable industries like banking and insurance if it operates in the oil and gas sector, which is known for its significant volatility due to global market circumstances. 

How to improve your Company Commercial Report 

The best way to improve your CCR is to pay off all of your current and past outstanding EMIs on time. Whether you are taking out a personal loan in your company’s name, make sure to pay off the entire outstanding amount by the due date. 

If you use the company’s credit card, make sure to pay the EMIs on time because an outstanding debt can negatively impact your CCR and cause your CIBIL rank to drop. Keep yourself informed of the business’s most recent transactions and credit reports because banks and other financial institutions frequently make mistakes. If such a mistake occurs, it is preferable to get it fixed immediately. 

The amount of money flowing inside/outside the company should always be monitored. You can use this to check your credit limit and determine the amount of credit you are eligible for borrowing from the bank. 

Using a long-term loan and making on-time payments is a good alternative to improving your company’s credit report. This will improve the company’s reputation in front of the bank. 

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