Consumer CIBIL Bureau vs Commercial CIBIL Bureau

What Is the Consumer CIBIL Bureau?

A consumer CIBIL bureau assigns a consumer CIBIL credit score to an individual that ranges between 300 and 900. It is basically a numeric value of the individual’s credit history derived from the credit information report. This report has information regarding the individual’s credit exposure, payment history, defaults, credit tenure etc.

What Is Commercial CIBIL Bureau?

Similar to the Consumer CIBIL Bureau, the Commercial CIBIL Bureau also looks into credit instruments. However, instead of individuals, the credit utilisation of companies, businesses and institutions is monitored. The details are reflected in the commercial credit report. Companies with a credit exposure od up to Rs. 50 crores get a CIBIL score in the range of 1 to 10.

Consumer CIBIL Bureau Vs Commercial CIBIL Bureau.

Parameters For Consumer CIBIL Score

While determining the creditworthiness, the Consumer Cibil Bureau uses certain parameters. In order to calculate the CIBIL score, the bureau utilizes the FICO scoring model. It does so by considering various aspects of your credit behavior and assigns weightage to each.. The credit bureau sources this information from banking and financial institutions. The weightage for factors impacting your CIBIL score is as follows:

• Payment history (record of repayments done and how punctually they were made): 30%
• Credit exposure (your outstanding dues): 25%
• Credit type and duration (the tenure of loans and whether they are secured or unsecured): 25%
• Other factors (number of active loans, active credit cards, number of enquiries raised by lenders so far): 20%

Creditworthiness and CIBIL score depends on these factors. Credit utilization ratio (CUR), the percentage of available credit used, plays a vital role. Keeping CUR below 40% is recommended for a healthy score. Higher ratios may lead to loan rejection and a negative CIBIL impact.

Your CIBIL score range significantly impacts your loan and credit card approval chances. A score between 750 - 900 indicates an excellent credit history, making approval easy. Scores of 700 - 750 show timely repayment, but lenders may conduct additional checks. A range of 550 - 700 signals irregular repayments, leading to higher interest rates or unfavorable terms. A score between 300 - 550 indicates defaults and undisciplined credit behavior, making obtaining loans or credit cards difficult.

To check your CIBIL score online, visit https://www.cibil.com/creditscore and click 'get your credit score' or 'check my CIBIL score.' First-time access offers one free check, while subsequent checks require a subscription plan. Provide identity details, proceed to payment, and you get the CIBIL score and report via email.

Parameters For CIBIL Credit Rank (CCR)

To determine the creditworthiness of Micro, Small, and Medium Enterprises (MSMEs), algorithms utilize their credit history data provided by banks and institutions to TransUnion CIBIL. The CIBIL MSME rank predicts the likelihood of an MSME loan becoming bad within a year. The analysis involves parameters like-

Liquidity Profile: MSME borrowers' liquidity profile is assessed by analyzing fund utilization patterns over the last two years.

Firmographics: Based Observations, Firmographics, including enterprise maturity, ownership type, industry, and location, are considered in evaluating the borrower's profile.

Repayment Behavior: Monthly payment analysis and asset classification are used to ascertain the borrower's repayment behavior, influencing their overall track record.

Based on this data, CIBIL assigns ranks to MSMEs, ranging from CMR 1 to 10. CMR 1 to 3 indicates a good track record, while CMR 4 to 7 shows delinquency but no NPA history. On the other hand, CMR 8 to 10 suggests a higher probability of the asset turning into an NPA within two years. This ranking system helps lending institutions assess the financial health of a business before extending a loan.

To access your CIBIL Commercial report online,

• Visit CIBIL's official website.
• Fill in the application form with your business's legal name, registered address, applicant's details, PAN number, and contact information.
• Choose a payment mode and pay the Rs 3,000 fee.
• Upon successful payment, receive a unique Registration ID and Transaction ID in your email inbox.
• Upload the required KYC documents and your commercial credit report and CIBIL rank will be delivered within a few days.

Conclusion

CIBIL credit reports are essential for lending decisions, allowing banks and financial institutions to assess creditworthiness. Maintaining a high CIBIL score or rank is vital for financial health. If you have successfully maintained a healthy CIBIL score for yourself or a CIBIL rank for your business, consider IIFL Finance reliable business loan services, offering transparent rates, quick disbursal, and end-to-end assistance.

FAQs

Q1. How is CIBIL rank different from a CIBIL credit score?

Ans. A CIBIL rank is a metric used by the Commercial CIBIL Bureau to measure the performance of businesses and institutions and it is ranked from 1 to 10 depending on how good or bad is their credit utilization history. CIBIL credit score, on the other hand is the metric used to measure the creditworthiness of consumers or individuals. It usually ranges between 300 to 900.

Q2. What is the best rank in CIBIL commercial report?

Ans. The best rank that a company can achieve in CIBIL commercials is 1.