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In Business, loans are sometimes very important. If you want to grow your business, you need to take some capital from a bank or other financial institution from time to time.

When you are borrowing money, the lender will check your credibilities such as your net worth against the amount you are taking, whether you have any ongoing loan with them or someone else, and whether you are capable of paying back the amount you are borrowing, etc.

Additionally, you need to submit your Business Model Report to convey to the lender what you want to do with the sum you are borrowing. All these things create the Business Credit History Report.

Once you start borrowing, the report will be generated automatically by the lender as it will be reported back to Credit Bureau such as CIBIL. Every time you take a loan, this Report will be checked thoroughly by the lenders.

What Does a Business Credit Report contain?

A Business Credit Report is really important for your Business to get Business Credit Cards, Secured and Unsecured Business Loans.

All in all this report reflects the entire credit history and financial behavior of your company or business in the past and is, therefore, an indication of your worthiness to get loans. MSME Credit Rating is really important.

Let’s see the Key Aspects a Business Credit Report covers;

Background Details

This part contains the background details such as the name of the company, parent company, official address, registration number, date of establishment, ownership details, etc.

Credit Score

There are certain credit bureaus working as per the guidelines set by RBI to evaluate the credit score of the borrower. The Score range is between 300 and 900. Usually, anything above 750 is deemed really good for borrowing. It indicates that you repay your loans within time.

Financial Details

This section of the report gives information on your business’s current financial situation. It helps a lender to decide on the loan amount they should offer you.

Payment History

Payment History is one of the biggest deciding factors. A lender checks carefully whether you are repaying your monthly installments on time or not.

If your payment history indicates you are paying back in time, you can borrow even bigger amounts. Also, it gives an idea of whether your business is acting as a guarantor for any loan. You can get help from CIMSME India.

Previous Searches

Previous searches indicate how many times your business has applied for or inquired about a loan from different lenders. A higher number of searches during a short period may indicate that the business is not in good condition and would add negativity to the report.

Final Thoughts !!!

It is quite evident that the business credit history report is really important if you want to get loans from lenders. Even if other factors go against you, a good repayment history in the report can get you into the good graces of lenders and provide you with all the amount you need. You might have to prepare a B2B credit risk management report too for yourself.