Does a name change affect your Credit Score?
Your name is one of the most important details that your credit report contains. It is your identity that helps lenders to identify you when it comes to your credit score. The other details in the credit report like your past loan and credit card payment history would relate to you, so your name must be spelt correctly and any changes in your name (post marriage) should be incorporated in your bank records. Therefore, you need to update your correct name in all your important official documents like identity documents including your passport, voter ID, Aadhaar card etc. Lenders decide to sanction you credit based on the documents like the Credit Report which should have your original name along with the right spelling. If your spelling is wrong, there would be a lot of confusion as far as the lender is concerned and this could delay your loan application process. Here we will try to understand how changing one's name can have an impact on their credit history.
Does Changing My Name Impact My Credit Score?
What you need to understand is that as far as your credit rating or credit history is concerned, changing your name has no impact on it. However, since the records relate to you. Therefore, you must report the new spelling of your name or your last name after marriage or divorce to your lenders immediately after the change. The banks will then update your personal data and all relevant documents within a given time frame. When you inform your bank about your name change or surname, the credit bureau is also provided with this update by the respective bank. While your records are modified automatically, there is no change in your credit score.
However, you need to understand that this modification of data does not happen instantly. There will be some initial confusion as well as delay in processing your loan by the lender when you apply for fresh credit. This is because your records are still in the process of being updated and cannot be accessed by the lender. So, intimidating the credit bureau is also one of your important responsibilities.
What Should I Do If My Name Has Been Changed?
There is a certain course of action that you need to follow if your name has been changed recently. The following points are extremely important:
You Need to Notify CIBIL About Your Name Change
If you have been diligent about your credit history by paying your outstanding loans and credit card payments on time, you need to inform CIBIL about your name change at once. You can mail to them regarding the change in your name so that there is no delay in updating your new spelling or surname post-marriage or divorce. On the other hand, you can alternatively raise a dispute on the CIBIL's website informing them to rectify your old name or surname.
When you want to write to CIBIL or raise a dispute to incorporate the new spelling of your name or your new surname, there are certain essential documents which need to be provided such as-
- Your current full name.
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Your full name that has been registered with the bank or the lender.
- Your current address as per registers.
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Your Aadhaar number in case it is linked to the loan account.
- Name change proof like any legal document indicating the change in name. This can include your divorce settlement, court affidavit or marriage certificate.
How Does the Delay Impact You?
In case there have been significant changes made to your name, it can be misleading for the lender. There can also be a case of identity mistake. In extreme situations, there might be liabilities relating to a different individual linked to your credit report due to this confusion in the name. So, any alteration in your name or surname must be communicated to the bank immediately to avoid such confusions. The change of name must not be communicated until the entire process of changing your name is completed. Once the name change process is complete and you have informed your lender, you need to follow up regularly with the credit bureau, to ensure that your revised name is incorporated. Once you find that your new name or surname has been incorporated in the records of CIBIL, you will no longer face any problem while applying for a fresh loan or credit card.
Go Through the Credit Report
Checking your credit report for errors is of utmost importance. This becomes even more necessary after you have changed your name (the spelling or the surname). After you have informed the credit bureau and the lender about the change, you must wait for a month and then send a request for your credit report. In this report, you can check if the credit bureau has updated the spelling of your name or not. Your eligibility for a loan or a credit card is based on your credit report. Banks have to exercise due
diligence while checking your credit report as per Reserve Bank of India's regulations before sanctioning a loan. So, you need to keep your credit report up to date.
In a nutshell, changing your name's spelling or even changing your last name after marriage or divorce has no impact on your Credit/CIBIL Score. What you need to understand is that you need to be proactive and inform your lender about this update as this information goes to the credit bureaus too.
