A Company CIBIL Report or a Company Credit Report (CCR) is a record of the credit history of your company. The Credit Information Bureau (India) Limited (CIBIL) maintains records of all credit-related activities of companies and individuals, including credit cards and loans. This report is created from data submitted by lending institutions all over the country.
What is CCR?
This report serves as a record of the past behaviour of a company and shows its financial health. Lenders typically look at this report before granting a loan to understand a company – the ownership type, its parent or subsidiary organisations, the number of years it has been operating, etc. Older and established firms have a better chance of having a good credit report compared to startups, simply because they have already proved to be credible.
Additional Reads – How To Get A Business Loan For Start-Up In India?
The factors that can influence your company’s credit report positively are:
1) Having a longer credit history.
2) Having a high credit utilisation ratio.
3) Having no outstanding debts and having a record of timely repayment of loans.
The Company CIBIL Score is a 3-digit numeric summary of your company report, ranging between 300-900. The CIBIL rank is a number ranging from 1-10. While CIBIL ranks are only assigned to companies with current credit exposure of up to Rs. 50 crores, CIBIL scores are available for all individual consumers. Not having a CIBIL rank does not imply that the company is underperforming.
Additional Read – Check Out The Steps To Improve Your CIBIL Score to Get Business Loan
How to check company CIBIL score
The two main parameters that are used to check company CIBIL credit scores are repayment behaviour and credit utilisation.
Good credit habits and timely repayments can help in improving your CIBIL credit scores. Here are a few other points you should keep in mind if you want to improve your CIBIL score:
- Keep track of your credit score so that if there is any issue or negative information, you can get it fixed.
- Never cross credit limits and keep an old credit card with good records to improve your CIBIL score.
- Do not apply for too many loans, since loan rejection negatively impacts your credit score.
Your company CIBIL report also keeps track of personal loans besides business loan. Your credit report includes all your transactions or defaults irrespective of the personal loan closure route you take. You must make sure that your lender updates the details to CIBIL after the closure of your loan. That serves as a basis for your CIBIL score evaluation. It would surely help you close the personal loans faster if the repayment options for the loans were flexible.
For a company to survive and flourish, having a good CIBIL report with decent scores is of utmost importance. It takes about 4-5 months of careful financial planning to improve your credit score, so start working on it today.
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