Of the four credit information bureaus in India, the Credit Information Bureau (India) Limited (CIBIL) is the most well-known. CIBIL analyses the credit profile of businesses as well as consumers to promote a fair credit lending system in the nation. However, the scoring model used for consumer is different from the scoring model used for commercial businesses. This article will help you understand the difference between consumer CIBIL bureau and commercial CIBIL bureau.
CIBIL is authorized by the Reserve Bank of India to store the data of consumers and businesses, analyse the data and calculate a CIBIL credit score for consumers, CIBIL rank for businesses. Both the metrics reflects the current and past repayment behavior of both consumers and businesses.
Let us understand how the Consumer CIBIL bureau works and the way it is different from commercial CIBIL bureau in detail.
Consumer CIBIL Bureau
Consumers are allotted a CIBIL credit score basis the available information they have and the score is updated on their CIBIL credit report. Every individual who has ever taken out a loan or a credit card or any other form of credit, will definitely have a CIBIL credit report.
CIBIL consumer bureau uses an algorithm for calculating a credit score. A consumer CIBIL credit score is a three digit numeric value that typically ranges from 300 to 900. The closer you move towards the CIBIL credit score of 900, the better you will be considered as a borrower.
Commercial CIBIL Bureau
Loans are necessary for everyone, be it an individual or a business. Business entities like sole proprietorships, partnership businesses, public limited corporations, and private limited companies may at some point require a business loan to close gap in the available funding. Therefore, a company that has a high CIBIL credit rank can easily get trade credit and loans from banks and non-banking financial institutions. Similar to how a CIBIL score reflects a person's financial reliability, a CIBIL credit rank reflects the creditworthiness of a corporation or a business.
Consumer CIBIL Bureau Vs Commercial CIBIL Bureau – What is the Difference
Here’ a comparison table to easily help you understand the difference between Consumer CIBIL Bureau Vs Commercial CIBIL Bureau:
Consumer CIBIL Bureau
Commercial CIBIL Bureau
Companies and Businesses
CIBIL Credit Modelling
CIBIL Credit Score
CIBIL Credit Rank
Credit Scoring Range
Ranges from 300 to 900
Ranges from 1 to 10
Type of Credit Report
CIBIL Credit Report
Commercial Credit Report
Factors Considered to Calculate Score/Rank
Number of active accounts
Number of old/closed accounts
Number of loans
Number of credit cards
Assigned credit limit usage
Nature of Industry
Credit Utilisation Ratio
The Consumer CIBIL Report is a document that offers thorough details regarding an individual’s creditworthiness based on that person's prior financial behaviour and credit history. Before extending any type of credit, financial organisations can determine a person's ability to repay by looking at their repayment history.
The Commercial CIBIL Report is a document that offers in-depth details about a company's or commercial business's creditworthiness based on the company's previous financial behaviour and credit history. It gives lenders the authority to evaluate the commercial firms' capacity for repayment before extending loans. The commercial bureau is the source of the Commercial CIBIL Report.
Importance of Consumer CIBIL Report and Commercial CIBIL Report
Whether it is a consumer CIBIL credit report or a commercial CIBIL credit rank report, both are important aspects when it comes to lending. Banks and lending institutions needs an assurance that the amount they are about to lend can be repaid by the other party as and when agreed. CIBIL credit reports allow banks, financial institutions and NBFCs to assess the creditworthiness, based on which, they take a decision of lending.
Remember, maintaining a high CIBIL credit score or CIBIL credit rank is essential for the financial health of an individual or a business.
FAQs Related to Consumer CIBIL Report and Commercial CIBIL Report
A Company Credit Report, or CCR for short, is a comprehensive report that summarises the financial standing of an organisation and is created utilising information from different credit institutions. Before granting any loan request, lenders utilise this report to evaluate the creditworthiness of a company. In addition to CIBIL, other credit bureaus also provide complete credit reports to corporations, just as they do for its individual members.
The most crucial aspect of a consumer’s CIBIL report is the three-digit CIBIL score, which summarises their creditworthiness. The CIBIL Report's credit history is used to determine the score. The CIBIL consumer report includes information about a person's EMI payment history over time for a variety of credit lines, including loans from banks and related entities. Details about your assets, fixed deposits, or savings are not included in the credit report.
A CIBIL rank is given to a firm, business or a corporation. But a CIBIL credit score is given to an individual. This is the main distinction between the two. The former has a rank scale from 1 to 10, with 1 being the best score for getting accepted for a business loan. The latter spans from 300 to 900, with any value near 900 being regarded as the best credit score.
Leading banks and other financial institutions that are CIBIL members have access to the Company Credit Report and CIBIL Rank. Before lending, these institutions can request CIBIL to have them assess the report of the specific business or individual.