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Commercial and Consumer CIBIL Score: Important Differences to know
- Published on: 14 Dec 2023
The consumer CIBIL score and commercial CIBIL score may sound similar but are quite different from one another since they cater to different categories of borrowers – individuals and businesses.
Lenders assess the creditworthiness of individual borrowers and businesses through credit reports, on which credit scores are based. Understanding the difference between the two is essential to know your eligibility and take the necessary steps to improve it.
Read on to know the difference between a consumer CIBIL and a commercial CIBIL report.
Consumer CIBIL focuses on compiling an individual’s credit ratings based on their credit profile. The bureau gets your financial data from various finance companies, such as banks, non-banking financial companies (NBFCs), credit card issuers and more.
With this information, they generate your credit reports, on which your credit scores are assigned. Lenders use these scores and reports to assess the lending risk associated with approving your application. A higher consumer CIBIL score indicates a lower risk and therefore, increases the chances of approval.
Commercial CIBIL scores are assigned by another segment of the bureau that collates the credit ratings of commercial entities, which include institutions, businesses, etc. With the help of commercial CIBIL reports and scores, lenders evaluate the creditworthiness of institutions and assess the lending risk.
This helps them make informed decisions to minimise the risk of default. A good credit score is important for businesses acquiring working capital loans and other types of credit to ensure smooth operations.
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Check out the key points of differences between these two types of CIBIL scores:
Consumer scores and reports assess the creditworthiness of individuals. On the other hand, commercial CIBIL scores and reports assess the creditworthiness of businesses and other institutions.
The consumer CIBIL score ranges between 300 to 900, with 300 as the lowest score and 900 being the highest score. Lenders consider scores above 750 as ideal.
Commercial CIBIL scores are ranked from 1 to 10. In commercial CIBIL scores, 1 is the highest rank.
CIBIL scores for consumers depend on the individual’s credit experience, repayment behaviour, credit utilisation ratio, debt-to-income ratio and other factors. Commercial CIBIL scores depend on factors that are specific to the institution or business, such as financial stability, profitability, payment history, credit utilisation, ongoing loans, etc.
Consumer CIBIL reports include information related to an individual’s personal finances and credit-related information. Commercial CIBIL reports include business finances and credit-related information.
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Here is a tabular overview of the above differences:
| Basis of Difference | Consumer CIBIL | Commercial CIBIL |
|---|---|---|
| Entity Assessed | Individual consumers | Commercial entities, including institutions and businesses |
| Credit Report Type | Consumer CIBIL report | Commercial CIBIL report |
| Credit Rating Model | Offers rating via scores | Offers rating via ranks |
| Purpose | Evaluate the creditworthiness and repayment capacity of an individual | Evaluate the creditworthiness and repayment capacity of a business or institution |
| Score Range | Between 300 to 900, with an ideal score being 750+ | Between 1 and 10 with 1 being the highest rank |
| Information Included | Includes financial and credit-related information of an individual | Includes financial and credit-related information about businesses |
| Factors Influencing Scores | Active credit accounts, old or closed credit accounts, credit cards, loans, credit mix, repayment history, credit utilisation ratio, debt-to-income ratio, etc. | Credit mix, financial stability, profitability, nature of credit, repayment history, credit utilisation ratio, old or closed credit accounts, etc. |
CIBIL reports and scores are essential tools to check a borrower’s creditworthiness. So, maintaining a healthy score and profile is important for individuals as well as businesses.
However, if you don’t have the ideal score, you can apply with Fibe. We rely on an alternate credit scoring mechanism to assess the eligibility of an applicant, enabling us to offer credit to those who are new to credit too.
You can apply for an Instant Personal Loan of up to ₹5 lakhs with Fibe by meeting the simple eligibility criteria. Download the Fibe Personal Loan App or register on our website to apply online!
Consumer CIBIL focuses on assessing the creditworthiness of individuals. On the other hand, commercial CIBIL focuses on businesses and other commercial institutions.
Consumer CIBIL score refers to a segment of the bureau that assesses the credit rating of an individual. It helps lenders make decisions by evaluating the risk associated with approving a borrower’s application.
