The credit score is one of the most instrumental parameters determining your eligibility for a loan. Whenever you apply for finance, the loan company checks your credit score to determine your creditworthiness. While four credit reporting agencies are active in India, the credit score assigned by TransUnion CIBIL is called the CIBIL score. CIBIL caters to two major segments of borrowers: individual consumers and commercial entities. Currently, the credit bureau maintains credit files of 32 million businesses and 600 million individuals, making it one of the biggest bureaus in the country.
Whether you are an individual or a business owner looking for credit, understanding the difference between consumer CIBIL and commercial CIBIL is essential. Let’s dive in to gain an insight into their purposes, features, and differences.
Read Also: What Is CIBIL Score - Credit Score Limit: Meaning and Impact
What is Consumer CIBIL and Its Purpose?
Consumer CIBIL is the segment of CIBIL that assesses the credit ratings of individual consumers based on their creditworthiness. It collects and evaluates data from multiple finance companies, including credit card issuers, NBFCs, banks, etc., to generate credit reports and calculate credit scores for individual consumers. The purpose is to let lending institutions determine your loan eligibility, amount, interest rate, credit limit, etc.
A consumer CIBIL report contains personal details like your name, PAN number, address, contact details, etc. It also includes your credit-related information, like your credit accounts, credit enquiries, payment history, outstanding balances, and negative entries like debt settlements or defaults. In short, it contains your information on an individual level. You may also qualify for a low CIBIL score Personal Loan, but a lower amount at a higher interest.
What is Commercial CIBIL and Its Purpose?
Commercial CIBIL is a CIBIL segment that focuses on assessing the credit histories of commercial entities like institutions, businesses, etc. Its purpose is to let lenders evaluate the entity’s credit report and make informed lending decisions while extending them credit. Based on a business's commercial CIBIL score, loan companies can measure the risk of sanctioning the loan application.
Several factors work together to determine an entity’s commercial CIBIL rank, including payment history, credit mix, credit utilisation, and negative information like delinquencies or defaults. The business’s profitability, debt repayment habits, and financial stability play an important role in determining its commercial CIBIL rating.
Read Also: Get Instant 50,000 Loan Without CIBIL Score
Features of Consumer CIBIL
A consumer CIBIL report focuses on your individual credit history, covering details like the following:
- Personal details, like your name, lender’s details, credit facilities in your name, contact details, credit age, etc.
- Account specifics, like your lender’s name, account numbers, account types, account ownership, date of account opening and closing, loan amounts, date of last payment, current outstanding balance, etc.
- Account status, like settlement, written-off, days past due, etc.
- Enquiry information, like the number of credit enquiries in a short period, behaviour of seeking credit, etc.
Features of Commercial CIBIL
A commercial CIBIL report is a comprehensive document summarising your organisation's financial standing. It has the following features to help lenders evaluate your creditworthiness:
- Identification, like your Report Order Number indicating the number of times you have accessed your report from the CIBIL’s database
- Enquiry information, including the company name, address, and identification code
- Borrower’s profile, including your company name, class of activity, legal constitution, contact details, company PAN, registration number, reported delinquencies, etc.
- CIBIL Rank ranging from 1 to 10
- Enquiry summary in the recent past
- Derogatory information like overdue, defaults, dishonoured cheques, etc.
- Outstanding balance
- Location details
- Details about related parties, individuals and entities
- Credit facility details about the borrower and guarantor, including payment status, overdue, etc.
Key Differences Between Consumer and Commercial CIBIL
While both consumer and commercial CIBIL serve the similar purpose of evaluating a loan applicant’s creditworthiness, they differ from each other in various ways. These include the following:
| Parameter | Consumer CIBIL | Commercial CIBIL |
| Meant for | Individual consumers | Commercial entities like institutions and businesses |
| Purpose | To evaluate an individual consumer’s creditworthiness and repayment capacity | To evaluate a business entity’s creditworthiness and repayment capacity |
| Model of Credit Rating | Consumer CIBIL score | Commercial CIBIL rank |
| Credit Score Range | Credit score ranging from 300 to 900 | CIBIL rank ranging from 1 to 10 |
| Type of Credit Report | CIBIL credit report | Commercial CIBIL report |
| Determining Factors | Active accounts, old or closed accounts, loans, credit cards, credit mix, repayment history, credit utilisation rate, DTI ratio, etc. | Company background, credit history, nature of history, credit utilisation ratio, financial stability, etc. |
| Information Included | Personal and individual credit-related information | Business-related information about their finances |
Read Also: What is CIBIL Report - CIBIL Meaning and Calculation
How to Check Consumer and Commercial CIBIL
There are different steps to check consumer CIBIL score and commercial CIBIL rank. These are as follows:
Steps to Check Commercial CIBIL Rank:
Step 1: Visit the official CIBIL website.
Step 2: Select ‘Get your CIBIL score’.
Step 3:Type in a few details, like your name, email address, phone number, date of birth, PIN code, etc.
Step 4: Attach a valid ID proof.
Step 5: Click ‘Accept and Continue’.
Step 6: Go to the dashboard and check your credit score.
Step 7: Click on CIBIL consumer login.
Step 8: Enter your login details to see your consumer CIBIL score.
Steps to Check Commercial CIBIL Rank:
Step 1: Visit the official CIBIL website at cibil.com/online/Company-credit-report.do
Step 2: Fill out an online form with details like your company’s legal constitution, registered address, contact details, PAN details, etc.
Step 3: Enter your commercial CIBIL login details.
Step 4: Select a payment mode to pay the applicable fee.
Step 5: Receive your registration and transaction ID at your email address.
Step 6: Upload your KYC documents to receive your commercial CIBIL report with rank.
Read Also: How to Check Your Current Cibil Score by Aadhar Card?
Existing H2: Importance of Maintaining a Good Credit Score
Maintaining a good credit score is crucial for both individuals and businesses. A solid credit history opens up numerous financial opportunities and provides a foundation for financial stability and growth. Here, we’ll discuss tips for maintaining a good Consumer CIBIL score and a good Commercial CIBIL score, as well as the broader impact of good credit scores on financial opportunities.
| Tips | Maintaining a Good Consumer CIBIL Score | Maintaining a Good Commercial CIBIL Score |
|---|
| Timely Payments | Ensure that you pay all your credit card bills, loan EMIs, and other dues on time. Late payments can significantly affect your credit score. | Ensure your business pays all its debts on time, including loans, credit lines, and supplier payments. Consistent timely payments are crucial. |
| Credit Utilization Ratio | Keep your credit utilization ratio (the percentage of your available credit you’re using) low. Ideally, it should be below 30%. | Just like personal credit, keep your business’s credit utilization ratio low. High utilization can be a red flag to lenders. |
| Avoid Multiple Credit Inquiries | Too many credit inquiries in a short period can negatively impact your score. Apply for new credit only when necessary. | Avoid making multiple credit applications within a short period. This can signal financial distress to potential lenders. |
| Monitor Credit Reports | Regularly check your credit report for errors or discrepancies and dispute any inaccuracies with the credit bureau. | Periodically check your commercial credit report for any errors or discrepancies and rectify them promptly. |
The Impact of Good Credit Scores on Financial Opportunities
- Lower Interest Rates: A good credit score can qualify you for lower interest rates on loans and credit cards, saving you significant amounts of money over time.
- Higher Credit Limits: Lenders are more willing to offer higher credit limits to individuals and businesses with good credit scores.
- Faster Loan Approvals: With a good credit score, you can expect quicker loan approval processes and better chances of securing credit when needed.
- Better Credit Terms: Good credit scores often result in more favorable credit terms, such as longer repayment periods and lower fees.
- Increased Negotiating Power: A strong credit score gives you more leverage to negotiate better terms with lenders and suppliers.
- Access to Premium Credit Products: Individuals and businesses with high credit scores can access premium credit products, including high-reward credit cards and larger loan amounts.
- Enhanced Reputation: For businesses, a good commercial credit score enhances your reputation with suppliers, partners, and investors, potentially leading to better business opportunities and growth prospects.
Conclusion
If you are looking for a loan, you will realise that the CIBIL score is one of the most crucial parameters to determine your creditworthiness. When you apply for a Personal Loan or SME loan from Hero FinCorp, your consumer CIBIL score will matter the most. However, the lender will check your commercial CIBIL report if you seek a conventional Business Loan. Hero FinCorp requires the minimum CIBIL score for Personal Loan with easy eligibility criteria and minimal documentation requirements.
Frequently Asked Questions
1. What is the fee for commercial CIBIL?
The fee for a commercial CIBIL report is ₹ 3,000.
2. How can I increase my commercial CIBIL score?
You can increase your commercial CIBIL score by repaying dues on time, staying away from disputes, and avoiding unnecessary credit products.
3. Who can access commercial credit reports?
Any business entity using credit can access commercial credit reports online.
4. What is the importance of commercial credit?
Commercial credit lets lenders evaluate the business owner's creditworthiness when they apply for a loan for their business.
5. What is the full form of the CMR report?
A CMR Report stands for CIBIL MSME Rank report, which helps lending institutions assess an MSME's financial history and creditworthiness.
