Home > Managing Debt > A Debt Collector Came After Me for $8.97

Comments 17 Comments
Advertiser Disclosure


We recently received a question from a reader who is looking for help with a past due movie rental that went to collections:

Today I received a letter in the mail from a collection agency stating that a DVD I rented from Family Video (probably 5 years ago) has gone to collections. The total that I owe is $8.97. Am I going to get a bad credit score for an unpaid bill of $8.97?! Help would be greatly appreciated.

— Jillian

The debt collection industry has grown into a multi-billion dollar business, and in order to stay competitive and profitable, collection companies are buying collection account portfolios from almost any company that’s willing to sell them or commission them to collect on their behalf. This includes credit card issuers, auto and mortgage lenders, cell phone companies, utility companies (cable, Internet, water, etc.), public libraries, gyms — and even video stores, as evidenced in your case.

A few years ago, these types of low dollar collections made headlines when a number of people began receiving collections for old, unpaid library fines that had been turned over to collections and reported in their credit reports. Yes, even minor past-due debts can turn into collections, regardless of how minor the amount. It’s something we should all be aware of.

If you find that you owe a small debt that seems trivial or insignificant and you’re on the fence about paying, it’s better to pay it than risk the chance of it turning into a collection and potentially hurting your credit down the road. No one wants to deal with the hassle of a collection, and it’s important to remember that a forgotten movie rental can happen to any of us.

Will a $9 Collection Hurt Your Credit?

The short answer here is: It depends. If the collection agency reports the collection to the credit bureaus, the answer is, yes, it will most likely have a significant impact and hurt your credit score. When it comes to collection accounts, the amount of the collection has no direct impact on your credit score. It’s the fact that the account made it to collection status that matters. This means a collection of $8 is just as damaging as a collection of $5,000 — with two exceptions. (If you’re worried about how a collection could be impacting your credit, you can check your credit score using a free tool like Credit.com’s Credit Report Card, which gives you your score plus a breakdown of the major components of your credit score – payment history, credit usage, length of credit history, mix of credit and new credit – to see what areas you need to work on. You can then do a deeper dive by checking your three major credit reports, which you can get for free every year.)

Exceptions to the Rule: FICO8 & VantageScore 3.0

In late 2008/early 2009, FICO made several significant updates to the FICO credit score model, including how low dollar collections were factored in the score calculation. In the FICO8 model, collection accounts less than $100 are excluded from the calculation. This means an $8 collection would have no impact on your credit score. It’s important to understand that this is only the case with the FICO8 version of the FICO score. And although lender adoption of FICO8 continues to grow, many lenders are still using older versions of the model. You also have to consider that some lenders may not use the FICO score at all — many do, but some do not.

Some lenders may use VantageScore 3.0, the newest version of the VantageScore model. This model doesn’t factor in any collection accounts that have been paid or settled. So, if you pay the $9 collection account, it won’t impact your new VantageScore 3.0.

How to Respond to a Collection Letter

If you receive a collection letter in the mail, it’s important that you address the collection as quickly as possible. If you think the debt might not be yours or you don’t agree that you owe the debt, you only have 30 days to dispute the collection and request that the debt be validated.

If the collector is unable to validate the debt by providing written proof that the debt belongs to you and that you do in fact owe it, they have no grounds for pursuing the collection and must stop all further collection attempts. If they don’t, they will be in direct violation of the Fair Debt Collection Practices Act.

If the debt is valid and you owe it, it’s best to pay it. For higher dollar collections, we’d normally suggest negotiating a settlement over paying the full amount, but there’s not much room for negotiation with an $8 debt.

It would be worth contacting the collection company directly to find out if they plan to report the collection. Order copies of your credit reports from AnnualCreditReport.com to confirm whether or not the collection has been reported yet. You can also monitor your credit score every month to ensure it isn’t reported using the free Credit Report Card. If the collection agency has not yet reported the collection, it may be in your best interest to go ahead and pay the $8 rather than going through the hassle of disputing or validating the debt.

For more on Debt Collection:

Image: Hemera

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

  • http://www.Credit.com/ Gerri Detweiler

    I am so very sorry to hear of your losses and what you are going through. It doesn’t sound like there is much for them to go after though it’s always possible they would try. Have you checked with a local Legal Aid office to find out if you can get help there? They can often review the situation and let you know if there are risks if you can’t pay.

  • http://www.Credit.com/ Gerri Detweiler

    Have you asked the credit reporting agency for the contact information for the company reporting it? They should supply that to you. If they won’t then you should file a complaint with the Consumer Financial Protection Agency.

  • RickardOGrady

    Works for you if you have the cash. Not so much if you don’t.

  • Ronald Tucker

    If this $8.97 debt went into collection 5 year ago it would be best to do nothing. This small collection debt will “fall off” your credit report in about 24 months

  • http://www.credit.com/ Credit.com Credit Experts

    The collection agency must verify the debt, in writing. It can pay to proceed carefully to be sure that the debt is actually yours. Here’s a little about your rights and how you should respond to the collector:
    The Ultimate Guide to Debt Collection.

  • Dean Johnston

    Redbox is a dollar. Hollywood charged 5x that amount, and the fees were ridiculous. Greed made those companies go out of business.

  • Rich

    I changed car ins and asked for my old policy to be cancelled. It never was but I was pestered for future premiums saying they were sending it to collection rather than cancelling. I talked with them, mailed a copy of my new policy and they readjusted and sent me a refund. In Indiana you cannot just cancel for non-payment.

  • dpavlako

    Not very good advice at all.

    First off, collection agencies will do and say whatever they can to separate you from your money. If you ask them if they will report the debt to the credit bureaus, of course they will tell you “yes”. Even if they tell you no, the will do it anyway. All they want is the money. Period – nothing else. They are not your friends, they are not there to “help you”, they are not anything but debt collectors, and will do whatever it takes.

    the ONLY way to handle this is to offer to pay the debt in full immediately AFTER you receive a letter from them (on their letterhead)that states who the original creditor is, that upon receipt of the funds from you (which your verification of their receipt will be the certified mail return receipt that they have signed) that they agree to:

    1. NEVER report this debt (or any derivation thereof) to ANY credit bureau or credit reporting agency.

    2. If it has been reported, to IMMEDIATELY remove the report from any and all credit reports – not just mark it paid, but REMOVE ANY REFERENCE OF IT (the DO have the ability to do this).

    3. If it has been reported, to IMMEDIATELY remove the report from any and all credit reports – not just mark it paid, but REMOVE ANY REFERENCE OF IT (the DO have the ability to do this).

    4. If it has been reported by the ORIGINAL creditor, to IMMEDIATELY remove that report from any and all credit reports – not just mark it paid, but REMOVE ANY REFERENCE OF IT (they also have the ability to do this, as the owner of that debt).

    5. That after they have done 1-4 and you have paid the debt, that they will never, in any form, contact you again or access your credit reports.

    After you have this letter (sent to you by certified mail – insist on this) agreeing to the above terms, on their letterhead, signed by someone who has the authority to agree to those terms and is verifiable, then you make the payment.

    Now, regarding making the payment, DO NOT UNDER ANY CIRCUMSTANCES EVER, EVER, EVER give them a personal check (they will then have access to your checking account and can take what they want from it), give them credit card info (same reason), debit card info (same reason) or anything else that can give them access to your finances. SEND THEM A MONEY ORDER FROM THE POST OFFICE, AND SEND IT CERTIFIED MAIL TO THE PERSON WHO SIGNED THE LETTER THAT YOU SHOULD NOW HAVE WHERE THEY AGREE TO YOUR TERMS, WITH RETURN RECEIPT! Also include a copy of the letter from them that they sent to you where they acknowledge agreement to the terms that you set forth.

    Yes, all of this will cost you as much as the $8.00 debt, but there is a reason for doing it this way. When they report the derogatory debt to the credit bureaus, you will at least have the amunition you need to show that you have paid the debt and that in return for you paying it, that they agreed to remove it – not just mark it as paid. Removing it will help your score. Marking it as paid still shows it as a derogatory item and will hurt your score, so the effort to do all this is worth a little more than 8 bucks.

    • Chris

      That’s far from the “only” way to deal with a debt collector, but it’s definitely one of the many options. There are a few things to point out here, though.

      1. When it comes to not reporting or removing the debt from your credit report, this is a viable option but it’s not necessarily that straight forward. In this situation it’s best if they never reported it, but if they have reported it you may not have success. Their agreements with the credit reporting bureaus are very specific about this issue, and they don’t want subscribers to use the reporting of trade lines as a negotiating tool. The CRA expects the collector to report honest, accurate information; if the collector agrees to remove a trade line in exchange for payment, they are breaching their agreement with the CRA. That’s not to say they don’t do it, Lord knows they do it very frequently, but many of them are going to pay attention to the cost/risk ratio involved with removing a trade line.

      For example, if two consumers offer to pay in full in exchange for having the trade line removed with one debt worth $20 and one worth $20,000, you can bet your mother’s favorite sewing kit that they are going to favor removing the larger amount over the small amount. Removing a trade line in exchange for payment (when they know the info is accurate) can cause them to have their ability to report anything at all revoked by the CRA. For smaller debts it may not be worth the risk to them but it probably would be for a larger debt.

      2. Regarding having the trade line placed by the Original Creditor removed – a debt collector cannot remove this under any circumstances, mainly because they physically can’t. They can only modify or remove something that they themselves added, and cannot change anything placed by another data furnisher.

      Pretend you loaned $10,000 to someone and they didn’t pay you back. You report it to the credit bureaus so others know, and then sell the debt to me for $500 just so you can get SOMETHING back on it. I now own the debt and you’re out of the picture. I then report the debt to the person’s credit report as well but get them to pay $750 as a full settlement with the terms that I remove my trade line AND your trade line. I make a $250 profit on my investment, you’re out $9,500, and they get a $9,250 discount on their debt and no one will ever know since I removed it from their credit report. Not too fair to you in this case.

      That’s why a debt collector cannot remove the original creditor’s trade line – only the company that placed the trade line can modify or remove it. In this case, I’d only be able to remove mine and yours would stay.

      3. As for never contacting you again, this probably won’t get agreed to. You paid them once, that makes you a sure thing to pay them again if they get assigned another debt you owe. The only time I’ve ever had a debt collector agree in writing to never contact me again for any reason, even on future debts, is when I successfully sued them for violating the FDCPA and they agreed to it in the settlement before it went to court.

      As for the rest, I pretty much agree with you for the most part. I concur that no one should ever pay them by check or over the phone, but I’m also against money orders. They are not easily traceable and hard to prove even with certified mail. You’d basically need a court order to get the issuer to show that it was cashed in some cases, but I still think it’s far better than using a personal check.

      I’d personally prefer a certified check from my bank, or using your bank’s bill pay service – namely the latter option. With most banks you just log in to your account, fill out the name and address of where you’re sending the check, add a reference or account number, and poof, done! The bank prints the check and mails it to them for you, and mine doesn’t even charge me postage or anything for the service.

      You have an authentic record from the bank of who the check was made out to and proof that it was cashed, all without revealing any of your account details to the collector. I don’t know about all banks, but my bank doesn’t debit my account until the check has been cashed, so if it genuinely gets lost I can have them send another and they don’t charge me for stop-payment or replacing it since they were responsible for ensuring it was delivered properly.

    • RickardOGrady

      I would:
      1) Demand written evidence of the debt existing in your name by way of certified copies, including all legal transfer paperwork proving the debt not only exists, but has not been bought (in other words *paid for*) by the debt company.

      2) Demand certified copy of all wet ink contracts stipulating that you would pay said debt, and that said debt is valid and not frivolously attached to your original borrowings. Credit card firms LOVE this trick.

      3) Demand wet ink evidence of everything they say to you, signed under their own personal liability. Nothing stings more than catching these vermin at a lie and holding them personally liable under law for fraud.

      Do not just turn around and pay. Do not accept their word that it’s all legit – get it in writing, under WET ink, which means ink from a pen not an image printed on a page.

  • Chuck

    Just do what I did. I told them I would pay in person and showed up with a bat and told them the next time I got a call I would know where to find them. Problem solved. Stinking gangsters.

  • Charles Piercey

    Ridiculous. A 3rd party collections agency has the responsibility to show proof of the debt. To say that the onus is on the person they are calling or writing to dispute the debt is contrary to the Law. Otherwise, any idiot with a computer could send out collections letters and you would spend your life disputing the silliness.

    • Deanna Templeton

      I understand where you’re coming from but just because there are laws in place under the FDCPA doesn’t mean that collectors don’t break them. The problem is that there are cases where collectors aren’t able to show (or don’t have) that proof. And if a consumer doesn’t dispute the collection or request them to validate the debt (with proof), they’d never know. The law does require a collector to show proof of the debt, and the collector is responsible for providing this proof — but only if the person they are calling or writing to requests the proof.

  • John

    A friend of mine ended up owing the IRS $14.97. She got two letters threatening her that they were going to throw her in jail, garnish her wages, and ruin her (I saw the letters). Yet Timothy Geithner, who owed the IRS over $10,000, was made head of the IRS. It ended up being a mistake on their part. No apology.

    • Bleddyn

      I suspect the wording of that letter did not use the words “throw her in jail” and “ruin her” So while you claim you saw the letter, it is obvious that your credibility at remembering what the letter actually said is suspect at best. If you really want to share a cute little story like that, you might want exclude the sympathy exaggerations and provide us with believable facts.

      • http://billcollectorshateme.com/ Bill Collectors Hate Me

        Exactly. Even I don’t believe that one!

  • Maggie

    This article makes me feel slightly less guilty that we dumped family video and started using Netflix.

  • Pingback: Is Your Cellphone Ruining Your Credit? « Jeanne Kelly Credit Coach()

  • Pingback: Movie Horror: A Debt Collector Came After Me for $8.97 | Financial News One()

  • Pingback: | Movie Horror: A Debt Collector Came After Me for $8.97()


Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team