Collection Agency and Credit Score

[Snave]

How will a bill being turned over to collections affect your credit score? The reason I ask is that we received a notice in the mail in regards to a $30 bill that was sent to collection from my wife's doctor/hospital (I think the practice is affiliated with the hospital). This was the first we ever heard of it and said it was from April and not paid. Clearly we would have paid a $30 bill as soon as we got it. As well, we got a bill from today from the hospital for another appointment that said this is the final notice. Again, we have never received a first or any other notice for that matter. This one hasn't been sent to collections, but comes off as if several prior bills have been sent. My wife is absolutely furious. We have a HSA account and all of our funds are in there, so paying is as easy as giving them the debit card info of the HSA. I know she is going to light up the accounting department and is mad that it might hurt our credit score.

[Seeker]

"A debt" being turned over to a collection agency, does not by itself, put a bad mark on your credit score. Mistakes do happen and ultimately, collection agencies are in business because many companies do not have the personpower/time to pursue people who owe them some amount of dollars.

If it IS your debt and you pay-it-off in full as soon as you are notified of the debt, than it should clear as being resolved. Late, but resolved. Ultimately, $30 being late should not be a problem, especially if you note to the collection agency that you did not know that this money was owed as you hadn't received any bills. Just write that you would like the debt to be cleared as "resolved" and not "settled."

Collection agencies are of benefit sometimes, specifically: if the debt were due to a mistake, this is a chance to write to a third party and provide evidence that the bill is wrong. I once contested a bill that grew to $45 of unpaid fees for auto-insurance changes that were made by an agent that I was referred to when the previous agent retired. I did not have any dealings with that agent and choose one closer to me to modify my auto insurance coverage.... but the "unknown" agent kept changing the plan back and I kept all the docs and kept having my agent put the changes back in. When the amount finally crossed a billing period and the new agent could not change the old period, and my account finally went to collections, I sent all the monthly copies and notes and dates circled. I never heard back from them and no more bills.

If a collection agency gets delay tactics (people ignoring them, or not paying or not willing to even talk), then they can pursue legal action and get a judgement against a person. But for $30, it's not worth it for them to do that with you. And if you pay them, they will not fight with you. They probably have bigger issues (other people with more debt) to contend with.

Essentially, I'm trying to say that your credit score should not be affected at all by this.... even if someone were to notice the "late" payment.... $30 is not worth denying credit to someone who otherwise has a good history.

[Snave]

We just got off the phone with the accounting department at the doctors office/hospital and they had our wrong address. The first thing my wife pointed out was that the collection agency seemed to have the correct one. The perosn in the department said they have a change of address marked for June or something like that in their computers, but couldn't tell what they had for the wrong one since it has now been changed. We have been living here for a while so I have no idea how they messed it up. I think more than anything my wife was mad b/c she has been in to see the doctor twice in the last two months and no one said a thing to her. Anyway, she asked about the agency they use and the women told her the company is basically a scare tactic and is not reported.