How to Check Small Business Credit Score

You might be aware of the credit score that is assigned based on your 'creditworthiness.' This is assigned based on your applying for loans and credit and how responsibly you repay them.

A business credit score is completely different from a personal credit score. It helps you manage your business finances, maintain a good impression in the market, and even determine the risk associated with your business. As you might have guessed, the business credit market is growing rapidly in India.

A business credit score is not just for big businesses– small businesses alone are worth ₹49.2 lakh crore of credit. This is out of ₹65.8 lakh crore outstanding credit balance in all of the commercial credit market.

What is a business credit score?

A business credit score assesses your repayment ability when taking loans for business and reports it to vendors. A business credit scoring model is completely different from a personal scoring model. Also, as new businesses don’t have a credit history, their new credit profile is created based on their personal credit history.

In India, it also determines the CIBIL MSME rank for small or medium-sized companies. A strong credit score for companies is anything above 700, and a low-risk CIBIL MSME rank is 1 to 4. Other bureaus have a different scoring model, for example, 1 to 100.

A business credit score is not just an analysis. It has the potential to hurt your real-world business partnerships and reputation. A company credit score is based on factors like company size, revenue, credit history, financial records, liabilities, business age, and legal records.

Business Bureaus and Their Scoring Models

Knowledge of the different scoring models is important for improving a credit score for a small business loan. The two types of business reports are:  RBI-licensed credit bureaus and a global commercial credit report provider, which is Dun & Bradstreet.

1.    CIBIL MSME rank

This is a product provided by TransUnion CIBIL. However, it is different from individual credit scores. It is evaluated from 1 to 10 ranks, 1 to 4 being low-risk ranks and 7 to 10 being the poorest ranks. The CIBIL MSME rank is based on trade lines, inquiries, public records like bankruptcy, etc.

2.    CRIF High Mark

This is a more refined ranking and scoring system. CRIF MSME rank is broken down into 1 to 13 ranks for both gating and pricing purposes. It also has a scoring system of 300 to 900. CRIF MSME credit report also shows credit acceleration flags.

3.    Equifax Small Business Credit Score

Equifax business credit report includes company information, registration, a risk score for delinquency, a payment index from 1 to 100 for repayment habits and a 12-month business failure score.

4.    Experian Small Business Credit Score

Experian assigns a business rank from 1 to 10 for creditworthiness. The report includes tradelines and credit summaries and business information.

5.    Dun & Bradstreet business credit report

This comes under the global commercial credit category. It is widely used as supplementary data by banks in India. It includes a company overview, trade references, legal records, and financial data. The scoring model uses the following metrics:

D&B Rating

This shows a financial strength indicator and composite credit appraisal from 1 to 4, indicating risk.

D&B PAYDEX Score

A record of transaction history showing how quickly the borrower pays back its suppliers.

How To Check My Business Credit Score

Likely, you don’t know how to check your business credit score. Don’t worry, you can refer to the following detailed guide to check your business credit score for free:

CIBIL MSME Rank

1. Go to the TransUnion CIBIL Commercial Rank page.
2. Create an account and select your desired report plan.
3. Provide your business identity by entering your company PAN, address, and GSTIN.
4. Enter the OTP sent to your number or email address.
5. Complete the transaction, if required, and view your commercial credit report and rank.

 Equifax Business Credit Report

1. Go to the Equifax India website.
2. Find the ‘Business Solutions’ or ‘Commercial Credit Information’ page.
3. Select your required product, for example, Commercial Equifax 360 report.
4. Register and upload your business details/documents like PAN, GSTIN, contact information, etc.
5. Pay subscription fees as shown.
6. Verify the OTP and download the report.

Experian Commercial Credit Report

The process to obtain a business credit report on the Experian website is different for sole proprietors and corporate entities.

Sole Proprietors

1. Visit the Commercial Bureau page on the Experian website.
2. Verify your identity as per instructions.
3. View the credit and repayment history.

Corporate Entities

1. Go to the Experian Commercial Reports page.
2. File a sales/membership enquiry on the website or directly via email — membership@in.experian.com / Consumer.Support@in.experian.com.
3. You will receive an acknowledgement from Experian or a request for missing documents.
4. You will be asked to undergo KYC and sign a commercial agreement.
5. You will be provided with pricing and an invoice.
6. You will receive credentials or API keys to download reports.

 CRIF High Rank

1. Go to the Business Credit Report Page on the CRIF High Rank website.
2. Visit the ‘Business Credit Rank’ section and fill in your business details like GST number, PAN, contact details, etc.
3. Pay the report fees (₹2700 - ₹3700) depending on the selected report.
4. Upload documents and verify OTP.
5. You will receive your business credit score and business credit rank.

Dun & Bradstreet 

1. Obtain a free D-U-N-S number on the D-U-N-S registration page.
2. Fill in your business details and obtain a unique D-U-N-S number after verification.
3. With this unique number, request a D-U-N-S file to establish a business profile and enable scoring.
4. Log in to the D&B credit platform, enter details and the D-U-N-S number
5. Pay fees as per requirements and evaluate your company credit score and metrics.

How To Check Business Credit Score Free

RBI has mandated one free report per year for every Indian. This means that following the above steps, you can check your business credit score for free, four times a year. This is applicable only if you are a sole proprietor using personal credit.

What Is A Good Business Credit Score?

Refer to the following table for accurate commercial credit score analysis:

How Does Business Credit Score Affect Business Relationships?

Your business credit score not only defines your business standing in the market but also your reputation. Vendors, lenders, and suppliers all rely on the repayment metrics mentioned in your business credit report. Since all your business suppliers work within this range, you must build trust with them. You will be monitoring your business failure risk with this report.

• You will receive priority bulk orders, higher credit limits, and favourable payment terms from suppliers.
• From banks and lenders, you will be offered low interest rates, easy business loan approvals, fast processes, and desired credit limits.
• You will be able to maintain long-term networking with partners, build trust and authority, and establish business standing.

You can build a robust and trustworthy business based on the above factors.

Conclusion

A business loan is an obligatory foundation for your company (unless you are into bootstrapping). Therefore, for strong business finances, establish a business credit profile with credit bureaus like Equifax, Experian, CIBIL MSME, and CRIF High Mark. Try to achieve numeric thresholds like 700 and above (CRIF/Experian), CIBIL MSME Rank 1 to 4, Equifax Payment Index 90+/Risk Score 750+, and D&B PAYDEX 80+.

Your business credit score reports each operational milestone and business record. Since RBI has enabled one free credit report for everyone, you can check a free credit report with every business credit bureau in a year. Remember that each evaluation metric and scoring model largely differs in credit bureaus like Equifax, CRIF High Mark and CIBIL MSME.

 FAQs

1. Can I get a business loan for a low CIBIL score?

 Yes, you can apply for a business loan based on collateral assets, choose smaller-scale fintechs, apply for government schemes, etc.

2. What happens when you have no business credit history?

For new business owners, your personal credit score is often used to establish your new business credit profile. With time, you can build your own business credit score based on future business operations and experience.

3. Is my business credit report updated in the same way as my personal credit score?

No, you have to ensure that all your business transactions and activities are reported to the business credit bureaus by suppliers and lenders.

4. How can I check my business credit report for free?

You can check one free business credit report in each of the business credit agencies once a year. This way you get at least 4 free business credit reports every year if you are a sole proprietor using personal credit.