Enhancing Company Credit Report – and CIBIL Score

March 12, 2025

9 min read

Company Credit Report Or Business Credit Score

What is Corporate CIBIL Score?

A Company credit score is a valuable credit rating score that is required by banks and NBFC (Non-Banking Finance Company). Most companies require credit for startups as well as for regular working capital management. Companies offering credit and business loans, in Significance of Business CIBIL Score turn, ask for credit rating of applying companies as a guarantee and factor of safety for the loans.

Companies seeking loans need to apply for a Company credit report for submission to the bank or NBFC where a loan has been applied. A company credit report has several features and they include the profile of the company being rated, identification of the report itself, the credit type for which the rating report is being generated, and a summary of the report.

Significance of Business CIBIL Score

It is important that a company credit score or a Business Credit Score be made favorable so that the applying company or business can get a loan. The factors that can adversely impact the business credit score can be:

A previous loan issued in the name of the company needs to be paid back before applying for a company credit report or a business credit score.
Applicants need to ensure there are no transaction errors in the rating report
A high credit utilization ratio is not desirable as it indicates a regular credit hunger of the business. This needs to be rectified over a period of time before a credit rating is sought and a new loan applied.
The size and the age of the enterprise need to be big and reputable so that the credit rating improves and a larger volume of business loans can be obtained.

History of timely repayment of past loans can be a great impacting factor.

Key Components of a CIBIL Company Credit Report

A CIBIL report for company provides a comprehensive overview of a company’s financial health and creditworthiness. Here are the key components:

Credit Score: This numerical representation indicates the company’s creditworthiness. A high score signifies strong financial management and lower credit risk.
Payment History: Records of past payments to suppliers and creditors help assess financial responsibility. Timely payments improve the score, while defaults lower it.
Credit Utilisation: A lower credit utilisation ratio is favourable, indicating that the business is not over-reliant on borrowers’ funds.
Public Records: Legal matters such as bankruptcies, tax liens, and court judgements appear here, affecting the company’s creditworthiness.
Business Information: Includes company registration details, industry classification, and legal structure, helping creditors evaluate the business.
Credit Inquiry Summary: Lists all external inquiries made by financial institutions, as frequent inquiries may indicate financial instability.
Trade References: Details from suppliers and vendors from the company’s financial reliability and payment behaviour.
Financial Statements: Some reports may include balance sheets, cash flow statements, and profit-and-loss statements to provide deeper financial insights.

A well-maintained corporate credit report helps in securing favourable credit terms and strengthening business relationships.

How To Improve Your Company Credit Report And Cibil Rank Visual Selection

What is CIBIL Rank?

CIBIL rank is a ranking system that summarises the CCR CIBIL in a single number, ranging from 1 to 10.

A rank closer to 1 increases the chances of loan approval.
It is available for businesses with credit exposure of up to Rs. 50 crores.
It reflects the company’s repayment behaviour, a key criterion lenders consider when approving loans.

The process of the Company credit report

While there is no free company CIBIL report, businesses can obtain it by visiting the official website of CIBIL and filling out the request form. The process of applying for a Business credit score has been tabulated below:

Item or features	Details required
Details required in a request form	Legal constitution of the business The registered address of the company Name and address of the person requiring the credit score PAN and other details of the business
Documents required	KYC (know your customer) and other ID documents Documents of proof of business
Payment	The fees for processing the score of the applicant are to be paid online. The fees can also be paid manually by means of a demand draft. Choose from 1-month (Rs. 3,000), 6-month (Rs. 6,000) or 12-month (Rs. 12,000) subscription plans and make the payment via debit/credit card, net banking or cash card.

Factors that Affect Your Company Credit Report

A CIBIL company credit report is influenced by several financial and operational factors. Credit score companies assess the following factors:

Length of Credit History: Older firms with a long credit history have better CIBIL scores.
Credit Utilisation Ratio: Using too much of the available credit may negatively impact the business credit report.
Repayment History: Timely EMI payments improve the CIBIL report for the company, while defaults lower the score.
Outstanding Debts: High unpaid debts can negatively impact the credit score.
Size and Life of Company: Established businesses tend to have stronger credit scores.
Industry Risks: Companies in volatile sectors, such as real estate, may receive lower CIBIL reports for company rankings due to market risks.

Maintaining a strong business credit report helps companies secure financing, partnerships, and sustainable growth.

Tips for keeping Company Credit reports favourable

The credit rating scale for a company credit report consists of a recovery ratings scale and independent credit evaluation. Both need to be monitored and kept positive.
Old credit cards need to be kept open. The company needs to ensure there are no dues outstanding in these cards and they will serve to increase credit rating. Companies should, however, avoid opening new credit card accounts as these will create an adverse score.
Companies need to ensure their bills are always paid on time as bills make up 35% of a credit score.
Loan enquiries show up in a credit score and companies could do well to check within a short period and close the enquiries as there is a 30 day grace period.
There are credit boosting techniques such as taking loans that are not required and paying them back quickly. The repayments reflect as good credit ratings and show up in the company credit score.
The secret to get regular loans for your business is to develop a good relationship with a loan provider and always maintain a high credit rating score. Loans will be regularly required for running a business smoothly. Managing finances and keeping a good track record in clearing bills and avoiding due payments will not only improve credit ratings but will give the business a good name and keep its reputation high.
The company credit score is not only a way of rating a company’s creditworthiness but to also reflect its business and business ethics. This is the reason credit institutions use the company credit score to evaluate businesses and the factor of risk in giving loans to them.

Conclusion

Maintaining a strong CIBIL score and rank requires timely payments, responsible credit utilisation, and financial stability. Regularly reviewing your corporate credit report helps identify areas for improvement and ensures better access to credit. Platforms like Lendingkart provide tailored financial solutions that help businesses strengthen their CIBOL report and improve their creditworthiness.

Company credit report FAQs

1. What is the difference between a CIBIL rank and a CIBIL score?

A CIBIL rank is given to a company and the rank is given on a score of 1 to 10. A rank upto 4 is considered very good. A CIBIL score is given to an individual and the score is between 300 to 900 and a score of 700 to 850 is considered very good.

2. What is a DUNS number?

A DUNS number is a unique identifying number given to a company by the credit score rating company for tracking its credit history.

3. What is the range of outstanding loan amounts that requires a credit report to be generated for further financing?

The outstanding loan amount that requires a company credit rating is Rs 10 lakhs to Rs 2 crores.

4. What does a company credit report mention?

The credit rating report of a company mentions the number of times the company or business has taken a loan, the number of sources that have given a loan and the persons or organisations that have been a guarantor for the loans.

5. Can a company challenge the credit rating given to it?

A company can dispute a credit rating report on the basis of any wrong information such as address, name and ownership and request a review. The company being assessed can issue documents proving its improvement in credit rating and ask for a review.

6. Does the company credit score have to be taken from any particular agency?

A company credit rating can be done from any of the listed credit institutions.

7. Does the type of business have an influence on the credit rating?

Yes, the type of business or industry has a direct impact on the company credit types. Industries or businesses such as IT and solar power are considered lucrative and improve a company’s credit score.

8. Do credit card transactions also show up in a company credit report?

Credit card dues sometimes show up in a company credit report and it is advised that applicants clear credit dues before applying for a credit score.

9. Can a company not having a company credit rating still apply for a business loan?

A company not having a company credit score can apply for a business loan, provided it does not have any outstanding loan more than the minimum amount required for a loan.

10. Will a record of prepayment of loans guarantee a good company credit score?

A record of loan prepayments is a positive indication and will show a good credit score.