What is a CIBIL score and what effect does it have on your business?
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What is a CIBIL score and what effect does it have on your business?

  • Highlights

  • A CIBIL score is a representation of your credit history

  • A good score gives you access to business loans easily

  • It also allows you to borrow a higher amount

  • It helps you build your business and invite investment


Understanding a CIBIL score

Credit Information Bureau (India) Limited (CIBIL) is the first-of-its-kind credit information company in India to collect and maintain credit records of individuals and commercial entities. CIBIL helps financial institutions better manage their business, and determines the creditworthiness of an individual or a business. It attains information via its associate partners, including members of banks and credit institutions. This information is provided to CIBIL every month. Based on this, CIBIL prepares a Credit Information Report (CIR). It also provides a CIBIL credit score, a three-digit numeric summary of your entire credit history. The CIBIL score ranges from 300 to 900, and a score above 700 is considered to be good.

How will it affect my business?

Your firm’s CIBIL score is calculated based on the credit behaviour as listed in the ‘Accounts’ and ‘Enquiries’ section of your CIR. If your business maintains a good CIBIL score, you will be able to enjoy several benefits when you apply for loans or credit cards. Some of these benefits include:

Quick and simplified loan procedures

Whenever you apply for a loan, your CIBIL score will determine

whether or not the lender clears the loan application. With an excellent credit score, you will face minimal challenges when getting a loan.This is because the lender has confidence in your ability to repay, based on your past behaviour. You will have access to the loan capital sooner, which means you can instantly carry out business transactions that were dependent on the loan.
Bajaj Finserv offers one of the best business loans in the market. Their Business Loan provides excellent flexibility, a nominal rate of interest, long tenor and has online application too.


To get a higher loan amount and lower interest

Having a good credit score reflects positively on you. It indicates to lenders that you can pay the amount you borrow in a timely manner. Because of this, you are more likely get a positive response from lending institutions when you apply for a big loan. Besides the high loan amount, you can also use your sound credit history to negotiate the rate of interest. Although you can get approvals for some loans even with an average credit score, the amount that you get will not be as high.

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