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One of the most important details that your credit report requires is your name. Your name is your identity when it comes to your CIBIL score because that helps lenders identify you. The other details in the credit report like your past loan repayment 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, it is important that you update your name in all important official documents like identity documents including your passport, voter ID, Aadhaar card, and so on. Lenders decide to sanction you a loan based on the documents like the Credit Information Report which should have your original name 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 the loan application process.
In this article, we will try and understand how changing one's name can have an impact on their credit history.
What you need to understand is that as far as your CIBIL rating or credit history is concerned, changing your name has no impact on it. However, since the records relate to you, it is important that you report the new spelling of your name or your surname after marriage or divorce to your banks immediately about the change. The banks on their part will update your personal data and all relevant documents within a given time frame.
When you inform the bank or the lender about your change of name 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 whatsoever in your credit score.
However, it is important for you 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 make a fresh application for a loan. This is so because your records are still in the process of being updated and cannot be accessed by the lender.
So, intimating the credit bureau is also one of your important responsibilities.
There is a certain course of action that you need to follow if your name has been changed. The following points are extremely important: CIBIL needs to be notified
If you have been diligent with regard to your credit history by paying your outstanding loans and credit card payments on time, you need to inform CIBIL about your change of name at once.
You could write a mail to CIBIL regarding the change in your name so that CIBIL does not delay in updating your new spelling or surname post marriage or divorce.
You could alternatively raise a dispute on the CIBIL site informing them to rectify your old name or surname. Important details that must be included
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. These details are your current full name, the full name that has been registered with the banker or the lender, and your current address as per the records of your Aadhaar account, if it is linked to your loan account. If there is any proof indicating the change in your name or surname like your divorce settlement, affidavit from court as well as your marriage certificate.
As mentioned earlier, you are identified by your name first and then you have supporting documents relating to your name. So, if there are changes made to your name which are significant, it creates confusion for the banker or the lender. There can be an error of identity.
In extreme situations, there might be liabilities relating to a different individual linked to your credit report due to this confusion in name. So, any alteration in your name or surname must be communicated to the bank or lenders immediately.
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 the banks as well as lenders, you need to follow up regularly with the credit bureau, so as 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 with fresh loan or credit card applications.
It is important to check your CIBIL report to see if there are any errors in it or not. This is even more significant after your name (spelling) or surname has been changed.
The request for your credit report should be made after a month has lapsed since informing the lender as well as the credit bureau about the change in your name or surname might take a while.
When you receive the report, examine the report to see if your new name or surname has been updated 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.
As far as banks or lenders are concerned, your CIBIL score creates an impression about you as a borrower. The documents in your credit report will contain your name, so that your credit history is associated with your name.
If you have a high CIBIL score, then, under normal circumstances you should not have any problems getting a sanction for loan or credit card. You would be entitled to preferential interest rates, faster processing of your loan, lesser paperwork, and so on.
However, if you have changed your name or surname and have not informed the banks and lenders on time, then you will derive no benefit from your high CIBIL score.
Your lenders will be confused regarding your identity and this will also prolong the sanctioning of the loan. Your loan will take a long time for processing and this will bring you at par with borrowers who have low CIBIL scores. Therefore, it is advisable that you immediately notify banks and other lenders of your new name. You also need to wait for your new name to be introduced in the records. After about a month, you need to make a request for your credit report. When you find that there are no errors in your credit report with regard to your name and other details, you can apply for a loan and you should have no problems getting a loan.
On the other hand, if you have a low CIBIL score, a change of name will only complicate matters more. You will need to get your credit report to find out how you can improve your credit score. It is suggested to take the advice of a professional to help you improve your score.
As a general rule, you need to ensure that you don't default on your loan repayments and credit card payments. You should not cross the credit limit of your credit card on a regular basis. There needs to a balanced mix of secured (home loans) and unsecured loans (personal loans) in your loan profile.
While it is clear that a change of name or surname does not have an impact on your credit score, it does create a lot of complications for you.
The best way to avoid the harassment in getting a loan due to a change in your name is to not apply for a loan and have your name changed simultaneously, if possible.
A change of name is a complicated matter and there are numerous legal supporting documents like a marriage certificate, divorce decree, or court affidavit required to change it.
Find out from the banks and other non-banking financial institutions about all the formalities required to get your name updated in their records. You need to apply for the change of name with supporting documents. Ensure that you carefully fill out the forms given by banks so that there are no errors in details of your name. Wait for the revised bank statements to see if your details have been updated or not.
Once your details in the bank records have been updated in the latest account statements, you need to follow up with CIBIL in writing. You should also raise a dispute to ensure that your records are up-to-date.
When you find that the CIBIL records are correct, you can apply or a loan and get it approved.