What is Commercial CIBIL Report - Its Features and Factors Affecting

It renders crucial information about their credit, such as credit history, CIBIL score, debt-to-income ratio, etc. Similarly, a commercial CIBIL report renders information about a business entity’s credit history. Individual and commercial CIBIL differ from each other. While CIBIL generates CIR (Credit Information Report) with individual credit scores, it creates CCR (Company Credit Report) for commercial entities like corporations and firms. 

Here is a rundown on the fundamentals of what is commercial CIBIL in detail.

What is the Commercial CIBIL Report?

A Company Credit Report is a detailed statement of a commercial entity's creditworthiness. It provides thorough information and a multi-dimensional file on Business Loan applicants, helping lenders make informed lending decisions. Whether the borrower is a public limited company, private limited company, partnership firm, or proprietorship, the commercial CIBIL report renders exclusive data about its financial health and credit history.

When a business owner applies for a Business Loan, the lending institution accesses their commercial CIBIL report online to determine their creditworthiness. It helps them mitigate the risks of missed EMIs or loan defaults. 

Key Features of Commercial CIBIL Report

Now that you have understood what commercial CIBIL report is, discover some of its key features below:

• The CCR contains company background, years of operation, financial information, CIBIL rank, and financial history like collections, repayments, and revenue generation.
• Loan companies can access a commercial entity’s credit history when they seek loans.
• A consistent CIBIL report helps get credit approval and disbursal instantly.

Also, Read: What is CIBIL Report - CIBIL Meaning and Calculation

Steps to Get Commercial CIBIL Report

Wondering how to get a commercial CIBIL report online? These are the steps to follow: 

• Visit the official CIBIL website at https://www.cibil.com/cibilrank 
• Fill out an application form with the applicant's address, contact details, legal structure, registered company address, PAN details, document details, etc. 
• Pay a subscription fee for the report required.
• Check the email address of a unique transaction ID and registration ID for the application request. 
• Upload KYC documents.
• Receive the CIBIL report with a free CIBIL score by email or delivered to the registered company address.

Factors that Affect the Commercial CIBIL Report

Here are a few factors affecting the commercial CIBIL report:

• Credit History: The enterprise’s vintage largely determines its commercial CIBIL rank. An entity with a longer vintage and credit history provides a better image in the CIBIL report.
• Credit Utilisation: If the business owners utilise a large sum from their available credit limit, it pushes up their credit utilisation ratio and negatively affects their credit report.
• Outstanding Balance: A large due balance negatively impacts an individual credit score because it demonstrates a lower repayment capacity. Similarly, a high outstanding balance makes a negative mark on a company's commercial CIBIL report and makes more credit inaccessible. 
• Company and Industry Profile: A company’s commercial report largely depends on its life, vintage, size, and industry. Some industries and sectors are highly risky for lenders due to economic or geo political aspects affecting their loan eligibility.

Also, Read: What is a Good Credit Score and 5 Tips to Maintain It

Best Ways to Improve the Commercial CIBIL Report

If the CIBIL score is low and a business owner wants to get a Business Loan, they must take these steps to improve it:

• Paying the Dues on Time: Whether an individual applies for a Personal or a Business Loan, the best method to safeguard the CIBIL report is to pay the EMIs on time. It is a foolproof way to maintain a solid repayment history.
• Reducing the Debt-to-Income (DTI) Ratio: If an individual or company owner has multiple debts, they must try to repay them as soon as possible. Maintaining a feasible amount of outstanding balance prevents its impact on a company’s repayment capacity.
• Balancing Assets and Liabilities: A company’s liabilities should not exceed its assets. The key is to maintain a perfect balance between the two.
• Prolonging the Credit History: Usually, loan companies prefer applicants with a long and consistent credit history. Hence, company owners should extend their credit history by taking and repaying loans on time. Doing that will automatically enhance a business's creditworthiness.
• Reducing Credit Utilisation: Utilising more than 40% of the available credit limit is detrimental to commercial CIBIL. Hence, keeping it low will help improve the company’s CIBIL rank.

Conclusion

Financial institutions base their Business Loan lending decisions on the enterprise’s commercial CIBIL report. Therefore, maintaining a consistent repayment history, low DTI and credit utilisation ratio are necessary to get the best loan offer. Hero FinCorp offers unsecured Business Loans of up to Rs. 40 Lakh at competitive interest rates, starting at 14%, with flexible repayment tenure of up to 60 months. Maintaining a high commercial CIBIL rank will help you get the best loan deal with favourable terms and conditions.

Also, Read: What Is CIBIL Score - Credit Score Limit: Meaning and Impact

Frequently Asked Questions

1. Why is a CIBIL Commercial Report Important?

CIBIL commercial report helps lenders determine an applicant’s creditworthiness, based on which they decide upon their loan approval, amount, and interest rate. 

2. Is it possible to dispute errors in a CIBIL Commercial Report?

If the report has errors, one may dispute them with the credit bureau by filling out an online application form.

3. How is the credit score calculated in a CIBIL Commercial Report?

The credit bureau calculates the score based on the entity’s credit history, business vintage, repayment habits, credit utilisation ratio, debt-to-income ratio, etc.

4. Is my personal credit score linked to my business's CIBIL Commercial Report?

Although personal credit scores are separate from commercial CIBIL ranks for registered businesses, many lenders check both to determine an applicant’s creditworthiness.

5. How long does information stay on a CIBIL Commercial Report?

Information in the CIBIL commercial report can stay there for seven years. However, serious information like bankruptcy can appear for up to ten years.