Company CIBIL Report (CCR) – Meaning, Factors, and How to Improve

Credit is the lifeline of a business, irrespective of its size. Like retail customers, proprietorships and business entities also require a good CIBIL score and a strong company credit rating to secure the financial support they need. That is when their company CIBIL report becomes essential. It proves an enterprise's creditworthiness, similar to what a consumer CIBIL or an individual’s credit report does for an individual borrower. Learn more about CIBIL scores and reports, how to check CIBIL, its importance, key components of a company, factors affecting it, and tips to improve your CIBIL rank in the following sections.Credit is the lifeline of a business, irrespective of its size. Like retail customers, proprietorships and business entities also require a good CIBIL score and a strong company credit rating to secure the financial support they need. That is when their company CIBIL report becomes essential. It proves an enterprise's creditworthiness, similar to what a consumer CIBIL or an individual’s credit report does for an individual borrower. Learn more about CIBIL scores and reports, how to check CIBIL, its importance, key components of a company, factors affecting it, and tips to improve your CIBIL rank in the following sections.

What is a Company CIBIL Report?

Company CIBIL report is a record of all financial and credit activities that a business owner undertakes. It contains information about all loans and credit lines the firm has taken in the past and present, the number of credit enquiries, credit utilization ratio, etc. It is one of the first and most crucial documents lenders assess to evaluate Business Loan applications. They analyze these reports to determine the applicant's creditworthiness and decide whether to approve or reject the application.

What is a CIBIL Rank?

While an individual CIBIL score ranges from 300 to 900, company CIBIL rank ranges from 1 to 10. After evaluating the company’s financial health, the credit bureau assigns a CIBIL rank between 1 and 10. The lower the number, the better. That means the highest rank is 1, and the lowest is 10. The bureau assigns a CIBIL rank only if the outstanding credit balance is from Rs 10 Lakh to Rs 50 Crore.

How to Get Your CIBIL Company Credit Report (CCR)?

Want to know how to check your company credit report and get your company’s CIBIL report? These are the steps to follow:

After completing these steps, TransUnion CIBIL will deliver your commercial CIBIL report and company’s CIBIL rank within a few days.

• Log in to the official CIBIL website.

• Fill out an online form with details like your name and address, company name and address, contact details, the firm’s PAN card details, and some company-related information.

• Make the required payment, after which you will receive a transaction ID and registration ID via email.

• Share your KYC documents.

After completing these steps, CIBIL will deliver your company CIBIL report and rank within a few days.

Also Read: How to Check Your Current CIBIL Score by PAN Card Number?

What are the Components of a Company Credit Report?

A company CIBIL report contains the following details that help lenders evaluate credit risk and determine loan eligibility, interest rates, and loan terms:

1. Profile: The profile section contains company details like the company name, address, and contact information. It also includes a unique identification number, the DUNS number, which CIBIL Limited assigns to the company.
2. Identification: This section contains details like the source, method, time of credit report generation, and a unique number for the report.
3. Credit Type and Enquiry: The section includes details such as the types of accounts active in the company’s name, outstanding loan amounts, and the total credit limit available for the business. The lender may also find recent credit enquiries here, which they analyse to determine the company’s credit utilisation ratio.
4. Report Summary: This section is a summary of the company’s overall credit profile. It contains information regarding outstanding debt, the number of active loans or credit cards, financing sources, and whether the company has acted as a guarantor for an individual or business loan.

What are the Benefits of a Business Credit Health Check?

Every business needs extra funding to sail through tough times, survive the competition, or expand operations. Therefore, checking the company CIBIL regularly has several benefits, including the following:

• It lets you know your chances of getting a Business Loan when needed from a financial institution.

• Regular business credit health check helps you identify the areas where you need to improve, such as repayment habits, outstanding balances, credit utilization ratio, etc.

• Regular checkups help spot any mistakes and irregularities in the report, so you can report them to the bureau and rectify them in time.

In short, regular business credit health checks help you keep tabs on your enterprise’s financial health and take appropriate steps to improve it.

Factors That Affect the Credit Rating of Your Company

These are a few factors that affect a company’s credit rating:

• Length of Credit History: The longer the credit history, the better the chances of building a good credit rating.

• Credit Utilization Ratio: The percentage of available credit the firm uses is the credit utilization ratio. A credit utilization ratio of up to 40% is an ideal CUR for a good credit rating.

• Repayment History: Always pay loan EMIs and credit card bills on time to secure a higher credit rating.

• Outstanding Debts: The total amount yet to pay is a crucial factor affecting the firm’s credit rating.

• Age of the Company: A business running for several years while honoring its credit obligations builds a good credit rating over time.

How to Improve Your Company Credit Report?

Learn how to check company CIBIL score, know where it stands, and follow these tips to improve the report:

• Repay all business credit card bills and loan EMIs on time.

• Maintain a credit utilization ratio of less than 40%

• Retain old business credit cards to showcase a long credit history.

• Improve the business finances and profitability.

• Check the company CIBIL report frequently and get any errors rectified immediately.

Conclusion

A CIBIL report is an essential record of a firm’s financial health and business credit activities. Therefore, before applying for a Business Loan, check the company’s CIBIL score and take steps to improve your CIBIL rank. Use a business loan interest rate calculator to check your interest rate and enhance your company credit score to reduce the overall interest cost.

Frequently Asked Questions

1. What is a company credit balance?

A company credit balance is the amount a company owes to the customers, lenders, partners, or other parties involved in the business.

2. What is the company credit period?

The company credit period is the duration the company has to repay the credit balance.

3. What is company credit loss?

Company credit loss is the amount a lender owes to a company owner, but the borrower fails to repay.