how-5-dollars-ruined-my-credit-score asked readers to tell us how they helped or hurt their credit scores. This story from reader Melinda Graham of York, Pa., shows how a little bill can cost you big money.

In the fall of 2008, I got a flu shot at my doctor's office. A few weeks later, I got billed $5 for my co-pay on a "blood draw" on that date. I procrastinated a bit on calling in to ask my doctor's office to fix what was probably just a miscoded procedure. Eventually I called and went through the usual ordeal of explaining the situation to person after person before finding the one who said they could take care of it.

In the fall of 2009, I got a notice from a collection agency that my doctor's office had turned over a $5 unpaid bill for collection. I racked my brain for another bill that might have fallen through the cracks, and couldn't come up with anything but the co-pay. So, there I was, looking at this collection notice and remembering the time spent on the phone the first time around, and I decided $5 wasn't worth the hassle. I mailed a check to the collection agency.

Fast forward a few months, when my fiance and I decided to really get into discussing our finances in preparation for merging them after we got married. I told him about, and how I like to review my credit report every few months. I hadn't checked it in a while, so we thought we should get our reports and pay for credit scores, too. And then I nearly fell off my chair when I saw that because the $5 medical bill had been reported by the collection agency, my score had dropped from 785 to 689! I was shocked: $5 = 96 points?! Boy, did I ever regret my decision to avoid the minor hassle of a phone call to straighten out the billing error.

Subsequently, I did contact the doctor's billing office and got it all straightened out. They also notified the collection agency of the billing error and had that entry removed from my credit report with the credit bureaus. Unfortunately, my score only went back up to 764.

No more collection agencies for me!

Here's what every consumer should do to protect or improve a credit score:

  • Pay all bills on time and keep your credit usage low. To improve your score, try to use only 1 percent to 10 percent of your available credit line.
  • Check credit reports on a regular basis. Federal law allows you to get a free report once a year from each of the credit reporting agencies - Equifax, Experian and TransUnion. Log on to to order or download yours.
  • Fix mistakes on your credit report. While lenders and credit card issuers report your activity to the credit bureaus, you are responsible for the accuracy of your credit report. Errors can be as simple as a wrong name or address or as complex as a line of credit that has been opened in your name, meaning you may be the victim of identity theft. Follow these six steps to fix errors on your credit reports.
  • Pay for your credit score. If you anticipate applying for a loan such as a mortgage, you should get your credit score a few months in advance so you can work on raising it. The higher your score, the lower your interest rate will be. You may also want to subscribe to a credit monitoring service, which will give you access to your score on a regular basis. Knowing how much your score goes up or down based on your financial behavior may help you improve your money management skills. Also, keeping an eye on your credit report and score means you can jump on a problem before it gets out of hand and destroys your credit score.

Do you have a story about your credit score? Email us at

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