What is a business credit report, and does my small business have one?

business credit report

In India, consumers and businesses alike have credit scores and credit reports. When you apply for a loan, lenders check your credit report when deciding to lend to you. A Commercial or Business Credit Report records your business’s credit history. Your credit report plays a vital role in your business’s ability to access a business loan, helping your future lenders assess your business’s financial situation and stability.

Let’s understand what your company credit report is, and what you can do to improve your chances of getting a business loan.

What is my business credit report, and why is it important?

Your business credit report reflects its credit history and lists your business’s financial behaviour since its inception. It includes information on:

  • Previous business loans you’ve taken
  • EMI payment schedule
  • Defaults your business might have faced over the years,
  •  Basic business details, like the business constitution, proprietor’s information, asset ownership, PAN etc. 

When applying for an SME loan, lenders pull your commercial credit report to assess your creditworthiness. A good credit history with no delayed payments or defaults will help you avail of corporate credit accounts, collateral-free loans, and different types of secured business loans to grow and manage your business.

Here is a sample Experian business credit report

Does my small business have a credit report if I have never taken an SME loan?

If you have ever taken a business loan or a corporate credit card, your business will have a credit history and a credit report.  

We recommend checking your credit report at least once every quarter to ensure all the information on it is accurate. You can download your business credit report from one of the four credit information companies authorized to operate in India, TransUnion CIBIL, Equifax, Experian, and CRIF Highmark. 

Here’s how to ready your credit report like a lender.

If you haven’t used any credit products offered by a formal lender before, your business credit report will indicate either No History (NH) or a –1 credit score. In such a case, the lender may check the proprietor’s credit report to see how you handle your personal finances. 

Having a good individual and commercial credit report is important to your small business. They help you build trust and creditworthiness with lenders and investors and open new and bigger opportunities for business funding. 

Click here to check out why your business credit report is important.

What information is on my credit report?

Your company credit report contains the following information about your business:

  1. Company details: The first part of your corporate credit report contains your business’s basic details, such as name, address, contact number and identifiers such as PAN, CIN, SIC or service tax number. It also includes your business’s registration details and latest credit details.
  2. Credit score: All operating credit bureaus in India have a credit score range of 300-900. Experian India follows the guidelines specified by the Reserve Bank of India to calculate your business credit score. An Experian score of 750 and above is considered a good credit score.
  3. Financial details: This section of the report shows your business’s current financial status, including a list of your assets and liabilities.
  4. Payment history: This section shows all your previous EMI payments, your previous and live loans, and if you are a guarantor on any existing loan. This section helps lenders determine if you will be able to repay the loan on time.
  5. Previous searches: This section shows the number of times your credit report has been pulled in the last 24 months and for what purpose. A high number of credit pulls may indicate that you have made many credit requests in the past and that your business may be in a cash crunch. Every time your business loan gets rejected, it is recorded in this section.

Every time you apply for an SME loan, lenders for a hard pull of your company credit report to assess your creditworthiness for the loan. Your credit score may be negatively impacted if, after the lender pulls your credit report, they reject your request for a loan. When you apply for a business loan with CreditEnable, we do a soft pull of your credit score. This means that we can assess your credit score without negatively impacting your credit and your chances of getting a business loan. 

CreditEnable partners with 25+ leading lenders in India, and we get you the business loan most suitable for your needs. Once we understand your requirements, we connect you with one of our lender partners who is most likely to lend to you and avoid any negative impact on your credit report.

Apply for a business loan with CreditEnable today!

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