Commercial borrowers like firms and corporations need credit to keep their businesses running smoothly. However, before extending credit, lenders need to evaluate the creditworthiness of potential borrowers. In order to do so, they refer to the company’s commercial CIBIL report, just as they consult an individual’s CIBIL report to assess their reputation as a responsible borrower.
What is a commercial CIBIL report?
The commercial CIBIL report is a credit report compiled by TransUnion CIBIL. It provides insights into the creditworthiness of commercial borrowers. This comprehensive document details information on a company's credit facilities, payment history, credit enquiries, and credit utilisation. Thus, it plays a crucial role in the credit evaluation process for businesses, allowing lenders and financial institutions to make informed lending decisions and minimise their credit risk.
Features of commercial CIBIL report
The commercial CIBIL report offers the following features to lenders:
Access to the credit history of potential commercial borrowers.
Access the financial history of potential borrowers before making lending decisions.
Lowered risk of lending, enabling you to lend with confidence.
Faster credit disbursal.
Insights into the overall borrowings across different banks and credit institutions.
How to access the commercial CIBIL report?
Follow the step-by-step method below to access the commercial CIBIL report.
- Visit the CIBIL website to get started.
Provide company information, including name, ID value, type, GSTN value, contact information, and address.
Submit and continue to the second step after agreeing to the terms and conditions.
Choose the mode of payment.
After completing payment, check your e-mail for the transaction ID and registration ID.
Share the necessary KYC documents
Receive the CIBIL rank and commercial CIBIL report at your registered address within a week.
Factors affecting commercial CIBIL report
The commercial CIBIL report is affected by the following factors:
Credit utilisation ratio: A higher credit-to-debt ratio negatively impacts a company's credit report as it signals a higher credit risk.
Credit history: Lenders look favourably upon a longer credit history as it indicates an established track record of good credit habits.
Outstanding debts: Managing external debts so they remain at a feasible amount is essential to maintain good credit health.
Payment history: Paying EMIs on time is crucial to create a positive impact on the credit report.
Industrial sector: The risks associated with different sectors can vary and can impact a company's commercial CIBIL report accordingly.
Company profile: The company profile, including its size, nature of business, and revenue also impact its commercial CIBIL report. An older, well-established company with a good revenue stream is likely to have a better credit report compared to a newer organisation.
Best ways to improve your commercial CIBIL report
Follow these steps to improve your commercial CIBIL report:
Pay our dues on time to maintain a good repayment history.
Pay off your debts to ensure that you have only a feasible number of outstanding debts to keep your company's repayment ability in good standing.
Balance your assets and liabilities so that the latter never exceeds the former
Maintain a long history of responsible credit behaviour.
Ensure that your credit utilisation ratio is at 40% or lower.
Monitor your credit statements regularly to identify any issues or errors and then address and remedy them immediately.
