Introduction

For micro, small, and medium enterprises (MSMEs), including small pharmacies and clinics, a strong credit profile is more important than ever. 

Whether you’re applying for a business loan, purchasing medical equipment, or negotiating better terms with suppliers, your Business Credit Score plays a major role in determining your financial credibility.

Fortunately, building and improving your Business CBIL Score (CIBIL stands for Credit Information Bureau India Limited) doesn’t require massive loans or complicated strategies.

With a few consistent financial habits, you can boost your creditworthiness, access better financing, and grow your small business with confidence.

Let’s explore the top 5 financial habits MSMEs should adopt to build a healthy CBIL score in 2025.

What is a Business CBIL Score?

A Business CIBIL Score is a 3-digit number (ranging from 300 to 900) that reflects how well your business handles credit. 

It is calculated by credit bureaus like CIBIL, Experian, and Equifax based on your repayment behavior, outstanding dues, credit utilization, and other financial factors.

A high credit score (above 750) means your business is low-risk for lenders. A low score (below 650) can limit your ability to get loans or force you into high-interest borrowing.

1. Pay Your EMIs, Credit Bills, and Vendor Dues On Time

Why It Matters:

Your payment history makes up around 35% of your CBIL score.

Even a single missed payment on a loan, credit card, or supplier invoice can negatively impact your score and stay on your report for years.

How to Do It:

• Set calendar reminders or enable auto-payments for EMIs and bills.
• Maintain an emergency cash buffer for tight months.
• Communicate with lenders or vendors early if you anticipate delays.

Real Impact:

A pharmacy owner who pays supplier bills and EMIs on time for 6 straight months can see an improvement of 30–50 points in their business credit score.

2. Keep Your Credit Utilization Below 30%

Why It Matters:

The Credit Utilization Ratio (CUR) is how much of your available credit limit you use. For example, using ₹60,000 from a ₹1,00,000 limit means 60% utilization too high!

Ideally, CUR should be below 30% to signal financial discipline.

How to Do It:

• Pay off outstanding amounts weekly or in small daily chunks.
• Request a credit limit increase (but use it responsibly).
• Spread expenses across multiple cards or accounts.

Real Example:

If a small pharmacy uses ₹20,000 from a ₹1,00,000 card limit and pays it down in parts every few days via UPI & Cards, their utilization stays low, positively impacting their Business CBIL Score.

3. Avoid Multiple Credit Applications in a Short Period

Why It Matters:

Every time you apply for a business loan or credit card, a hard inquiry is made on your credit report.

Too many applications in a short time reduce your score and signal that your business may be financially unstable.

How to Do It:

• Only apply when necessary and when you’re confident of approval.
• Avoid applying to multiple lenders at once.
• Use pre-approved offers from banks or NBFCs whenever possible.

Pro Tip:

Space out your credit applications by at least 3 to 6 months to reduce the negative impact on your CBIL score.

4. Maintain a Healthy Mix of Secured and Unsecured Credit

Why It Matters:

Having both secured loans (like term loans, LAP, equipment loans) and unsecured loans (credit cards, overdrafts) shows that your business can handle different types of financial obligations responsibly.

This diversity adds about 10% weight to your credit score.

How to Do It:

• If you only have a working capital loan, consider adding a secured loan like an equipment lease.
• Use business credit cards for recurring expenses, but repay them on time.
• Avoid relying on just one type of credit.

Bonus Tip:

Using UPI-linked business credit cards for daily purchases helps build repayment history and contributes to a healthier mix.

5. Monitor Your Credit Report Regularly and Fix Errors

Why It Matters:

CIBIL and other credit bureaus sometimes make mistakes, like showing unpaid loans that were cleared or duplicate entries. Such errors can unfairly drag down your business credit score.

How to Do It:

• Download your free credit report every 6 to 12 months from CIBIL or Experian.
• Look for wrong entries, outdated info, or accounts that don’t belong to you.
• Use the credit bureau’s dispute resolution process to fix issues.

Impact:

Fixing even one wrongly reported overdue loan can raise your CBIL score by 50–100 points.