diff --git a/NEXT_CHANGELOG.md b/NEXT_CHANGELOG.md
index 508c20f54a..4bb3f0533e 100644
--- a/NEXT_CHANGELOG.md
+++ b/NEXT_CHANGELOG.md
@@ -11,6 +11,7 @@
 * Added optional `cloud` argument to `databricks_current_config` data source to explicitly set the cloud type (`aws`, `azure`, `gcp`) instead of relying on host-based detection.
 
 * Added `api` field to dual account/workspace resources (`databricks_user`, `databricks_service_principal`, `databricks_group`, `databricks_group_role`, `databricks_group_member`, `databricks_user_role`, `databricks_service_principal_role`, `databricks_user_instance_profile`, `databricks_group_instance_profile`, `databricks_metastore`, `databricks_metastore_assignment`, `databricks_metastore_data_access`, `databricks_storage_credential`, `databricks_service_principal_secret`, `databricks_access_control_rule_set`) to explicitly control whether account-level or workspace-level APIs are used. This enables support for unified hosts like `api.databricks.com` where the API level cannot be inferred from the host ([#5483](https://github.com/databricks/terraform-provider-databricks/pull/5483)).
+* Allow in-place renames for `databricks_credential` and `databricks_external_location` resources ([#5538](https://github.com/databricks/terraform-provider-databricks/pull/5538)).
 
 ### Bug Fixes
 
diff --git a/catalog/resource_credential.go b/catalog/resource_credential.go
index 809e7c35a4..17aca96757 100644
--- a/catalog/resource_credential.go
+++ b/catalog/resource_credential.go
@@ -28,7 +28,6 @@ var credentialSchema = common.StructToSchema(catalog.CredentialInfo{},
 			common.CustomizeSchemaPath(m, computed).SetComputed()
 		}
 
-		common.CustomizeSchemaPath(m, "name").SetForceNew()
 		common.CustomizeSchemaPath(m, "databricks_gcp_service_account").SetComputed()
 		common.CustomizeSchemaPath(m, "databricks_gcp_service_account", "email").SetComputed()
 		common.CustomizeSchemaPath(m, "databricks_gcp_service_account", "credential_id").SetComputed()
@@ -143,6 +142,9 @@ func ResourceCredential() common.Resource {
 			if !d.HasChangeExcept("owner") {
 				return nil
 			}
+			if d.HasChange("name") {
+				updateCredRequest.NewName = d.Get("name").(string)
+			}
 			if d.HasChange("read_only") {
 				updateCredRequest.ForceSendFields = append(updateCredRequest.ForceSendFields, "ReadOnly")
 			}
diff --git a/catalog/resource_credential_test.go b/catalog/resource_credential_test.go
index 8e8a66b470..1e41af6f41 100644
--- a/catalog/resource_credential_test.go
+++ b/catalog/resource_credential_test.go
@@ -158,19 +158,20 @@ func TestCreateIsolatedCredential(t *testing.T) {
 	})
 }
 
-func TestUpdateCredentialSchemaForceNew(t *testing.T) {
+func TestUpdateCredentialSchema(t *testing.T) {
 	qa.ResourceFixture{
 		MockWorkspaceClientFunc: func(w *mocks.MockWorkspaceClient) {
 			e := w.GetMockCredentialsAPI().EXPECT()
 			e.UpdateCredential(mock.Anything, catalog.UpdateCredentialRequest{
 				NameArg: "name",
+				NewName: "rename",
 				AwsIamRole: &catalog.AwsIamRole{
 					RoleArn: "arn:aws:iam::account:role/role",
 				},
 				Comment: "comment",
 			}).Return(&catalog.CredentialInfo{
 				Id:   "1234-5678",
-				Name: "name",
+				Name: "rename",
 				AwsIamRole: &catalog.AwsIamRole{
 					RoleArn: "arn:aws:iam::account:role/role",
 				},
@@ -186,10 +187,9 @@ func TestUpdateCredentialSchemaForceNew(t *testing.T) {
 				Comment: "comment",
 			}, nil)
 		},
-		RequiresNew: true,
-		Resource:    ResourceCredential(),
-		Update:      true,
-		ID:          "name",
+		Resource: ResourceCredential(),
+		Update:   true,
+		ID:       "name",
 		InstanceState: map[string]string{
 			"name":                    "name",
 			"purpose":                 "SERVICE",
diff --git a/catalog/resource_external_location.go b/catalog/resource_external_location.go
index e5a58d2d30..0655358cf1 100644
--- a/catalog/resource_external_location.go
+++ b/catalog/resource_external_location.go
@@ -31,7 +31,7 @@ func ResourceExternalLocation() common.Resource {
 				return old == "false" && new == "true"
 			}
 			common.CustomizeSchemaPath(m, "url").SetRequired().SetCustomSuppressDiff(ucDirectoryPathSlashOnlySuppressDiff)
-			common.CustomizeSchemaPath(m, "name").SetRequired().SetForceNew().SetCustomSuppressDiff(common.EqualFoldDiffSuppress)
+			common.CustomizeSchemaPath(m, "name").SetRequired().SetCustomSuppressDiff(common.EqualFoldDiffSuppress)
 			common.CustomizeSchemaPath(m, "credential_name").SetRequired()
 			common.CustomizeSchemaPath(m, "isolation_mode").SetComputed()
 			common.CustomizeSchemaPath(m, "owner").SetComputed()
@@ -130,7 +130,6 @@ func ResourceExternalLocation() common.Resource {
 					return err
 				}
 			}
-
 			if !d.HasChangeExcept("owner") {
 				return nil
 			}
@@ -140,6 +139,11 @@ func ResourceExternalLocation() common.Resource {
 					updateExternalLocationRequest.ForceSendFields = append(updateExternalLocationRequest.ForceSendFields, value)
 				}
 			}
+
+			if d.HasChange("name") {
+				updateExternalLocationRequest.NewName = d.Get("name").(string)
+			}
+
 			// ugly hack until API is fixed
 			if updateExternalLocationRequest.FileEventQueue != nil {
 				if updateExternalLocationRequest.FileEventQueue.ManagedAqs != nil {
diff --git a/catalog/resource_external_location_test.go b/catalog/resource_external_location_test.go
index 9e14315232..f3f036c705 100644
--- a/catalog/resource_external_location_test.go
+++ b/catalog/resource_external_location_test.go
@@ -329,9 +329,10 @@ func TestUpdateExternalLocationName(t *testing.T) {
 		Fixtures: []qa.HTTPFixture{
 			{
 				Method:   "PATCH",
-				Resource: "/api/2.1/unity-catalog/external-locations/abc",
+				Resource: "/api/2.1/unity-catalog/external-locations/abc-old",
 				ExpectedRequest: catalog.UpdateExternalLocation{
 					Url:            "s3://foo/bar",
+					NewName:        "abc",
 					CredentialName: "bcd",
 					Comment:        "def",
 					ReadOnly:       false,
@@ -339,7 +340,7 @@ func TestUpdateExternalLocationName(t *testing.T) {
 			},
 			{
 				Method:   "GET",
-				Resource: "/api/2.1/unity-catalog/external-locations/abc?",
+				Resource: "/api/2.1/unity-catalog/external-locations/abc-old?",
 				Response: catalog.ExternalLocationInfo{
 					Name:           "abc",
 					Url:            "s3://foo/bar",
@@ -348,10 +349,9 @@ func TestUpdateExternalLocationName(t *testing.T) {
 				},
 			},
 		},
-		Resource:    ResourceExternalLocation(),
-		Update:      true,
-		RequiresNew: true,
-		ID:          "abc",
+		Resource: ResourceExternalLocation(),
+		Update:   true,
+		ID:       "abc-old",
 		InstanceState: map[string]string{
 			"name":            "abc-old",
 			"url":             "s3://foo/bar",