Your business credit report plays an important role in understanding your company’s creditworthiness. Banks and NBFCs use a commercial credit information report to check whether a particular firm is eligible for a business loan or credit. It has all business-related information regarding past loans, current credit obligations, credit usage ratio, and the number of inquiries made.
This blog will help you to get an understanding of the credit information report, sections of a commercial credit information report, types of business reports, business credit report agencies, the difference between CIBIL score and CIBIL rank, the importance of company credit reports, ways to improve company credit reports, etc. when you apply for a business loan in India.
A commercial credit information report or business credit report is a report of a commercial entity credit history that is prepared for potential commercial borrowers, such as public limited companies and private limited companies. It has a record of the company’s credit history, based on the data submitted by various lending institutions across India. It helps them in making better and quicker lending decisions by analyzing these types of business reports.
TransUnion CIBIL, Experian, CRIF High Mark and Equifax are business credit reporting agencies in India. These reports are used by different banks and NBFCs before offering credit to their customers looking for loans corresponding to their business.
For better understanding we are trying to explain the report prepare by CIBIL. For commercial entities such as public limited companies, private limited companies, partnership firms, and proprietorships there is CIBIL Rank and Company Credit Report (CCR). It helps to determine company’s creditworthiness.
When individuals apply for a loan, lenders pull a CIBIL credit report and it ranges from 300 to 900, where 900 is considered the maximum score. Just like individuals, businesses also apply for a business loan to finance the purchase of new machinery, acquire inventory, or expand the operation, etc., and when they do, lenders pull their commercial credit information report, which ranges from 1-10, where 1 is considered as the best rank.
Also Read: What Is a Letter Of Credit And How Does It Helps Business To Manage Finances?
Generally, a typical Commercial credit information report consists of below details about the business:
1. Report Order Details
2. Enquiry Information
3. Borrower Profile
It is divided into four different sections.
5. Credit Profile Summary
6. Enquiry Summary
7. Derogatory Information
8. Outstanding Balances by Credit Facility Groups details
9. Location Details
10. Relationship Details
11. Credit Facility Details – As Borrower
12. Credit Facility Details – As Guarantor
13. Suit Filed Details
14. Credit Rating Summary
15. Enquiry Details in the Last 24 Months
Also Read: 10 Key Points to Consider While Scaling Your Business in India
Maintaining a good credit history is not as hard as it seems. You can ensure that you are on the right financial track by following the right steps. By following the above-mentioned steps, you can demonstrate yourself as a responsible borrower and improve your credit score. Improving your credit score can take time and it is important to be patient and consistent in your efforts.
You can find many business credit reporting agencies online that offer various tools and products that can help companies to check, monitor, and seek to manage their scores and might give the company credit report in India free.
Covid-19, a once-in-a-century pandemic, has hit the Indian economy hard and has affected almost all sectors.
Collateral-free loan refers to any loan that does not require any asset, security deposit or the backing of a guarantor. These are also called unsecured loans.
Transformation and growth are a part of life. As a professional, you have immense growth opportunities, some of which you are unable to pursue due to a lack of funding.
Irrespective of how efficiently you plan your finances, sometimes, financial needs occur all of a sudden and mostly when you least expect it.
A personal loan is a preferred choice for many individuals looking for a quick financing solution.
Leave a Comment