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Commercial Report

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CIBIL Commercial Report & CIBIL Rank-

CIBIL Commercial Report is a report card of MSMEs of credit history and credit behavior while CMR (CIBIL MSMS Rating) is rank between 1-10 where rating 1 is the best and 10 is the. Worst. CIBIL Commercial Credit Report( CCR) is prepared by Transunion CIBIL. Commercial Credit Report is highly usable and actionable which provides a detailed insight into a business entity to whom Bank is lending.

List of topics covered:

What is CIBIL Commercial Report and CIBIL Rank?

CIBIL Commercial Report

Much as a CIBIL score refers to an individual's lending value, a trade report by CIBIL underlines a company's lending worth. The CIBIL commercial report is therefore a systematic declaration reflecting an organization's financial health in terms of information obtained from banks and financial institutions. This detailed report is further used for assessing a company's creditworthiness when a commercial loan is needed.

The following information is included in a CIBIL commercial report:

  • Company background: Include background information on the company, such as the legal establishment, branches, ownership, and operating years.
  • Financial information: Financial data that decide the company's credit standards.
  • Financial history: Finance info, including payments, collections, income production, and more relevant to the financial history of the company. Besides these, the CIBIL rank is also essential. A rank of CIBIL resembles a score of CIBIL. It numerically summarises the company's CCR. Just like the score of CIBIL is between 300 and 900, a CCR ranges from 1 to 10, where 1 is the best possible. Only businesses with Rs.10 lakh credit exposure to Rs.10 crore are granted this designation. When you get closer to 1 the higher your chances are for a business loan to be secured.

CIBIL Rank

CIBIL Rank is equivalent to the CIBIL score given to individuals, provided to commercial organizations. It sums up the complete Company Credit Report (CCR) on a scale of 1 to 10 in one digit. Basically, the credit rank shows the chance of default payments. Therefore lower the ranking, the more likely a loan is. Therefore, 1 is the highest possible ranking. It should be remembered, however, that a credit rank is not allocated to all firms. The credit rank is applicable to only companies with loan exposure of 10 lakh to 50 crores.

CIBIL Score vs CIBIL Rank

Companies also apply for loans to run and expand their business and as the process of loan approval Banks and lenders generate Commercial Credit Reports from Transunion CIBIL and other Credit Bureus to check the creditworthiness of a borrower.

Below is the comparison and difference individual CIBIL Score and CIBIL Rank to have a better understanding of both. Individual CIBIL Score Three-digit figure between 300 and 900 CIBIL Score more or equal to 750- Great Chances of loan approval Summary of past and present loan track record For Companies and Firms Ranking ranges between 1 to 10 1 is the best and 10 is the worst rank Summary of track record of Company/ firm past and current loan

CIBIL Score CIBIL Rank
For Individuals For Companies(Prop,Partnership,Pvt Ltd etc)
Three-digit figure between 300 and 900 Ranking ranges between 1 to 10
CIBIL Score more or equal to 750-, Great Chances of loan approval Closer to 10 – higher the chances of loan approval
Summary of past and present loan track record Summary of track record of Company/ firm past and current loan


How to read CIBIL Commercial CIBIL?

Commercial Credit Information Report contains detailed information about a business entity which may be Proprietorship, Partnership, LLP., Private Ltd, or a Public limited firm.

Following are the different sections covered in a Commercial Credit Report

  1. Identification: It is present at the top and contains Report Order Number, which indicates the number of times your report has been accessed from CIBIL’s database.

  2. Enquiry Information: This section specifies the name of the company, an identification code, and address.

  3. Borrower Profile: It is further divided into 4 sub-sections:

    • Borrower Details: It includes company name, legal constitution, class of activity, etc.

    • Address and Contact Details: It includes the registered office address, phone number, etc.

    • Identification Details: It includes the company’s PAN, company registration number, etc.

    • Delinquencies Reported on the Borrower: It includes the payment status of the company and the guarantors.

  4. CIBIL Rank: This section displays your credit rank, which ranges on a scale of 1 to 10. The lower the rank, the better are the chances of getting a loan.

  5. Enquiry Summary: This section displays the list of inquiries done by lenders in the recent past.

  6. Derogatory Information: This section contains information regarding defaults, overdue and dishonored cheques.

  7. Outstanding Balance Details: This section provides an overview of the company’s asset classification with respect to the credit facilities availed.

  8. Location Details: This section mentions additional contact information of the company.

  9. Related Parties Details: It gives information about the related individuals or entities.

  10. Credit Facility Details – As Borrower: This section contains details of the credit facilities availed by the company. It contains credit facility details, payment status, and overdue details.

  11. Credit Facility Details – As Guarantor: This section contains details about the credit facilities guaranteed by the company.

  12. Suit Filed Details: It gives details of suits filed (if any) by any of the previous lenders for the company.

  13. Credit Rating Summary: It contains the latest three credit ratings assigned to the company by an external accredited rating agency.

  14. Enquiry Details (Last 24 Months): This section provides details regarding the inquiries made by lenders for your company’s credit application.

Importance of CIBIL Commercial Report

CIBIL Commercial Report is a very important document when a company approaches Bank or lender for a loan or credit facility. This report shows the behavior and financial discipline of lenders and proves the creditworthiness of a borrower. CIBIL Rank gives an idea about the riskiness of a borrower and helps the lender in taking the decision of approval or rejection of loan approval. CIBIL Rank close to 1 increases the chance of loan approval. A good ranking is a key and indicator that how likely the prospective borrower is to repay the loan on time and without default. To avoid the chances companies should check their CIBIL Commercial Report regularly or at least once a year

Documents Required to Check CIBIL Commercial Report

  1. For Public and Private Limited Companies

    • Proof of Address (any 1): Electricity or telephone bill, bank account statement or passbook, registered lease/ sale agreement of office premises, address proof issued by commercial or multinational banks, registration certificate issued under Shops & Establishment Act.

    • A copy of board resolution along with authorized signatory list and specimen signature.

    • Company PAN.

    • Proof of Identity of one of the authorized signatories: PAN/ Passport/ Driving Licence.

    ( Any utility bill or telephone bill should not more than ninety days old )

  2. For Partnerships

    • Proof of Address (any 1): Electricity or telephone bill, registered lease or sale agreement, bank account statement, etc.

    • Copy of partnership deed or certificate of registration.

    • List of authorized signatories with specimen signatures.

    • PAN of the partnership firm.

    • Proof of Identity of Partner requesting for the Company Credit Report: PAN, Driving Licence or Passport.

  3. For Proprietorships

    Proof of Address (any 1): Electricity bill, registration certificate issued under Shops & Establishment Act, etc.

    Proof of Identity of the Proprietor: PAN, Passport, or Driving License.

    NOTE: The above documents should be self-attested by the proprietor. Any utility bill or telephone bill should not more than ninety days old

Factors Affecting CIBIL Commercial Report

Following is the list of the major factors which are taken into consideration while preparing the CIBIL Commercial Credit Report (CCR), and the CIBIL Rank:

Payment History: This refers to the financial discipline of the company while making repayment to the lender. Timely making loan repayment and interest servicing of overdraft/cash credit help in having a good CIBIL Rank.

Credit Utilization Ratio: This refers to the ratio of credit used by the company out of the total credit (loans and overdraft) available to the company A high credit utilization ratio shows the company as credit dependency on external funds to run the business hungry, instead of internal cash flow and thus negatively impacts the Company Credit Report and CIBIL Rank.

Length of Credit History: It refers to the duration over which the company has availed loans and repaid them. A longer credit history generally translates to a good CIBIL rank, provided the payments were made punctually.

Outstanding Debts: This refers to the sum of ongoing loans and other outstanding debts of the company which a company is supposed to repay. A large amount of such overdue or outstanding indicates lower repayment ability and highly leveraged company and lower the CIBIL Rank.

Vintage and Size of Company: Companies which are in their current business for a long period have better chances of loan approval since vintage companies are perceived as more creditworthy and have a high rate of loan approval also avail loans at a low rate of interest with easy terms and conditions. Stability and continuous growth help lenders in taking quick decision.

Turnover and Profit of Business: Turnover of a company tells about the size of the company and profit of the company shows that how efficiently and professionally a company is being run by its owners. High Turn Over and good Profit have a direct bearing on repaying capacity of a company. Generally higher ratio of profits and turnover facilitates a firm to avail loans to meet their credit requirement.

How can I Improve my CIBIL Rank? The following are some key actions that can help you improve the CIBIL Rank as these get recorded in your commercial CIBIL report:

  • Always pay the loan EMIs and other outstanding dues on time to maintain a good repayment history.

  • Try to maintain a low credit utilization ratio to improve the company’s creditworthiness.

  • Sustain a long and good credit history to improve your company’s credibility.

  • Always maintain a feasible amount of outstanding debts, so that the company’s repayment ability is not affected.

  • Maintain a good balance between the company’s assets and available liabilities.

FAQ

CIBIL CCR or CIBIL Commercial Credit Report is a record of companies' past repayment of loans and credit facilities. Information on loan repayment is pulled from the Banks and lenders from where a company has taken loans. CIBIL CCR is a tool Banks and lenders to determine your creditworthiness and future risk of repayment default.
CIBIL CCR or Company Credit Report is a record of your credit payment history. This information is pulled from various credit institutions. CCR is used by prospective lenders (banks and other financial institutions) to determine your credit behavior.

CIBIL rank refers to the summary of your Company Credit Report in the form of one number. It ranges on a scale of 1 to 10.

You can download the report from the Company Credit Report (Commercial) portal of CIBIL by submitting some details and paying the requisite fee.

Members of CIBIL, including Banks, NBFCs and Financial Institutions can access Company Credit Report and CIBIL Rank.

The best CIBIL Rank any company can get is 1 while the worst would be 10.

Report Order Number refers to a unique number generated every time your Company Credit Report is accessed from CIBIL’s database.

An individual is assigned CIBIL Score which ranges from 300-900 while CIBIL Rank which ranges between 1 to 10 is given to commercial entities. A CIBIL Score that is close to 900 is considered good while any CIBIL Rank which is close to 1 is considered good.

When NA is being shown on Commercial CIBIL that means either the company have not taken any loan in the past or the amount of loan which a company have taken is either outstanding loan amount is not between Rs 10 Lakh and Rs 50 Crore.

There could be capturing of some information which is correct but displaying in your company commercial credit report. You should raise a dispute to rectify the incorrect information in such a case t the moment you observe such errors raise the dispute with CIBIL. Any wrong information can spoil your CIBIL Commercial report and CIBIL Rank

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