What is Commercial CIBIL Report - Its Features and Factors Affecting

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

Here is a detailed rundown of the fundamentals of commercial CIBIL.

What is the Commercial CIBIL Report?

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

When a business owner applies for a Business Loan, the lending institution accesses their commercial credit report online to determine their company CIBIL score and overall financial credibility. It helps them mitigate the risks of missed EMIs, financial distress, or loan defaults.

Key Features of Commercial CIBIL Report

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

• The CCR contains company background information, including years of operation, financial statements, CIBIL ranking, and economic history, which encompasses collections, repayments, and revenue generation.
• Loan companies can access a commercial entity’s credit report when they seek loans.
• A consistent company’s CIBIL score helps facilitate instant credit approval and disbursement.

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

Steps to Get Commercial CIBIL Report

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

• Visit the official CIBIL website at CIBIL Rank
• 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 company’s credit report:

• Credit History: The enterprise’s vintage largely determines its commercial CIBIL score. An entity with longer credit history provides a better image in the CIBIL report.
• Credit Usage: If business owners utilise a large sum from their available limit, it increases their credit utilisation ratio and may report negatively on their credit rating. Maintaining a low credit utilisation ratio is crucial for better credit.
• Outstanding Debts: A large due balance negatively impacts a company’s financial profile because it demonstrates a lower repayment capacity. Similarly, outstanding loans leave a negative mark on the commercial credit report, making more credit inaccessible.
• Company and Industry Profile: A company’s commercial report largely depends on its life, vintage, size, and industry. Some sectors are considered high credit risk by the rating agency due to economic or geopolitical factors that affect the report.
• Payment Patterns: Timely payments and delays are directly reflected in the company’s CIBIL report, shaping its financial responsibility and credibility.

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

Best Ways to Improve the Commercial CIBIL Report

If the company’s CIBIL score is low and a business owner wants to get a Business Loan, they must take these steps to improve the commercial CIBIL report:

• Timely Payments: Whether for a personal or a business loan, the best way to protect the CIBIL report is to follow proper repayment schedules. This shows responsible financial behaviour.
• Reducing the Debt-to-Income (DTI) Ratio: Repaying outstanding debts reduces financial strain, improves cash flow, and strengthens the company’s financial performance.
• Balancing Assets and Liabilities: A company’s liabilities should not exceed its assets. Maintaining healthy financial statements ensures stability.
• Extending Credit History: Lenders prefer applicants with a longer credit record. Regular borrowing and timely payments help improve your CIBIL and overall financial stability.
• Low Credit Utilisation Ratio: Utilising less than 40% of available credit strengthens the company’s financial profile and enhances the company’s credit report.

Conclusion

Financial institutions base their loan applications and decisions on the CIBIL commercial report issued by TransUnion CIBIL, offering insights into financial discipline. Therefore, maintaining a consistent repayment history, low DTI, and low credit utilisation ratio are necessary to get the best loan offer.

Hero FinCorp offers unsecured business credit of up to Rs. 40 Lakh at competitive interest rates, starting at 14%, with flexible repayment schedules of up to 60 months. Maintaining a high company CIBIL score is crucial for businesses seeking financial support.

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.