Commercial Credit
Report Gain Insights into Company Credit Score
A Good Credit MSME Rank is a key step to better business loan
What is Commercial Credit Report ?
Credit Commercial Report is a report card of MSMEs of credit history and credit behavior while CMR (Credit MSMS Rating) is rank between 1-10 where rating 1 is the best and 10 is the. Worst. Credit Commercial Credit Report( CCR) is prepared by Transunion Credit. Commercial Credit Report is highly usable and actionable which provides a detailed insight into a business entity to whom Bank is lending.
What is a Credit Rank?
Credit Rank is equivalent to the Credit 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.
What information is included in a Credit 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 Credit rank is also essential. A rank of Credit resembles a score of Credit. It numerically summarises the company’s CCR. Just like the score of Credit 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.
Credit Score vs Credit 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 Credit and other Credit Bureus to check the creditworthiness of a borrower.
Below is the comparison and difference individual Credit Score and Credit Rank to have a better understanding of both. Individual Credit Score Three-digit figure between 300 and 900 Credit 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
| Credit Score | Credit Rank |
|---|---|
| For Individuals | For Companies(Prop,Partnership,Pvt Ltd etc) |
| Three-digit figure between 300 and 900 | Ranking ranges between 1 to 10 |
| Credit 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 Credit Commercial Credit?
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
Identification: It is present at the top and contains Report Order Number, which indicates the number of times your report has been accessed from Credit’s database.
Enquiry Information: This section specifies the name of the company, an identification code, and address.
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.
Credit 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.
Enquiry Summary: This section displays the list of inquiries done by lenders in the recent past.
Derogatory Information: This section contains information regarding defaults, overdue and dishonored cheques.
Outstanding Balance Details: This section provides an overview of the company’s asset classification with respect to the credit facilities availed.
Location Details: This section mentions additional contact information of the company.
Related Parties Details: It gives information about the related individuals or entities.
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.
Credit Facility Details – As Guarantor: This section contains details about the credit facilities guaranteed by the company.
Suit Filed Details: It gives details of suits filed (if any) by any of the previous lenders for the company.
Credit Rating Summary: It contains the latest three credit ratings assigned to the company by an external accredited rating agency.
Enquiry Details (Last 24 Months): This section provides details regarding the inquiries made by lenders for your company’s credit application.
Why is the Credit Commercial Report Important?
Credit Rank is equivalent to the Credit 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.
Why is the Credit Commercial Report Important?
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 singatories: PAN/ Passport/ Driving Licence.
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.
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.
How to Improve Your Credit Rank
- 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
Credit CCR or Credit 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. Credit CCR is a tool Banks and lenders to determine your creditworthiness and future risk of repayment default.
Credit 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.
Credit 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 Credit by submitting some details and paying the requisite fee.
Members of Credit, including Banks, NBFCs and Financial Institutions can access Company Credit Report and Credit Rank.
The best Credit 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 Credit’s database.
An individual is assigned Credit Score which ranges from 300-900 while Credit Rank which ranges between 1 to 10 is given to commercial entities. A Credit Score that is close to 900 is considered good while any Credit Rank which is close to 1 is considered good.
When NA is being shown on Commercial Credit 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 Credit. Any wrong information can spoil your Credit Commercial report and Credit Rank
