Will a $30 collection affect my score? If so, by how much?

[Anonymous]

Recently started building my credit (May) with 2 secured cards.

A month later I received a collection letter from AT&T for a $30 bill (which I was unaware of) - I called AT&T and told them the reason I had cancelled their service 17 months ago was because while I was doing online classes their internet connection would drop every 10 minutes - after putting me on hold the representative said he just closed the account and that the $30 was not owed anymore.

After obtaining my credit reports (TU, EX, EQ) the $30 shows up on all 3 reports as a "Collection: Paid - Closed".

I still can't obtain a FICO score, but when I do in another 3 months, will this $30 collection affect my score? If so, by how much?

Any help would be appreciated and sorry if this is the wrong forum to be posting in.

[Anonymous]

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@Anonymous wrote:

Recently started building my credit (May) with 2 secured cards.

A month later I received a collection letter from AT&T for a $30 bill (which I was unaware of) - I called AT&T and told them the reason I had cancelled their service 17 months ago was because while I was doing online classes their internet connection would drop every 10 minutes - after putting me on hold the representative said he just closed the account and that the $30 was not owed anymore.

After obtaining my credit reports (TU, EX, EQ) the $30 shows up on all 3 reports as a "Collection: Paid - Closed".

I still can't obtain a FICO score, but when I do in another 3 months, will this $30 collection affect my score? If so, by how much?

Any help would be appreciated and sorry if this is the wrong forum to be posting in.

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It will definitely affect your credit score.  The $30 dollar amount really isn't as important as the collection itself is the harmful entry.  Impossible to tell how much as that is dependent on your overall credit file but it could be a significant amount.  Your best bet is to work with AT&T on a pay for delete.  If you have questions about that I would suggest visiting out rebuilding forum

[Anonymous]

That is false. If it is under $100, the fico calculation ignores it. However, it is still on your credit report which could lead to denials of credit.

http://www.myfico.com/crediteducation/fico-score-8.aspx

Bottom of the page.

[Callandra]

^For FICO 8, that is true; collections under $100 are not going to affect your score, BUT it will still show on your report. However, older FICO models (this may be important for a mortgage or car) do count collections under $100. Since it was marked as paid, I suggest hitting the Rebuilding Forum and write some goodwill letters. Luckily for CCs, you can easily explain what happened and it's for such a small amount (seriously? $30 to collections? When I worked in a hospital, they'd just eat anything under $100) to an U/W if you get denied for a CC. 

[Anonymous]

@johnny thank you for pointing that out! I appreciate it.

@callandra I don't plan on looking for a mortgage for maybe another year or 2, but thank you for bringin up "Good Will Letters" - I will definitely look into that

@irish you kind of scared me there a little - thank you for taking the time to respond

[takeshi74]

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@Anonymous wrote:

Will a $30 collection affect my score? If so, by how much?

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Any derogs will affect your score and tend to haunt you, holding down your scores, as long as they report.  Granted, some have less impact than others and some taper off over time but you want 0 derogs on your reports.  Regardless of scoring impact 0 is better than anything above 0.  You want your Payment History to be 100% give that it is the biggest factor.

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

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@Anonymous wrote:

Any help would be appreciated and sorry if this is the wrong forum to be posting in.

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Hit the Rebuilding subforum and see if there's anything you can do to address it.

[Anonymous]

I was able to remove the Enhanced Recovery Collection from both my Experian and Equifax reports - woohoo!

Curiously though, and I know CK are FAKO (useless) scores, after that happened my FAKO score from Equifax dropped by 5 points. LOL