Over the weekend, Fred wrote in with a question about disputing an unfair bill:

My current credit score is about 780.  However, I just received a bill for about $4,700 which I consider to be severely excessive and I want to dispute it. How will my credit rating be affected?  I have been told that I can write a letter to each credit bureau explaining that the bill is in dispute and that this will be posted for each inquiry into my credit rating.  Supposedly, the overall effect on my credit rating would be minimal. Is this another myth?

Since Fred has a pretty great credit score right now, I recommend that he is very careful about dealing with this bill. If it is sent to collections, charged-off or becomes a judgment in court, his credit score could drop very dramatically.  When it comes to credit scores, it is often best to pay first and ask questions later. That doesn&39;t mean that he has to stop fighting the account, just that he should protect his credit first. 

Now, let&39;s tackle the rest of his question. I think that what he was told is a strange amalgamation of several different truths. Here are some facts that clear it up: 

1. A simple bill in dispute wouldn&39;t appear on a credit report. Most types of bills are not reported to the credit bureaus. Medical bill, utility bills, etc would only appear on credit reports if they had already been sold to a collection agency. I doubt that this bill is appearing on Fred&39;s credit report.

2. A collection account will cause serious credit score damage. Collection account records are considered a serious negative and can cause your credit score to drop dramatically. And collection records remain on your credit report for 7 years even if you pay off the debt at a later point.  Once a collection account appears on your credit report, you are stuck with the damage for a long time.

3. You do have a right to post a consumer statement on your credit report. The credit bureaus allow consumers to post short messages on their credit reports; usually to explain the story behind something inaccurate or damaging. This statement can be seen when your credit report is accessed by businesses. But since many businesses only check credit scores, and the statement doesn&39;t impact your score, it doesn&39;t usually make a difference.

4. You do have a right to dispute inaccurate information on your credit report. If there was a $4,700 bill appearing on Fred&39;s credit report that didn&39;t belong to him, he could dispute it with the credit bureaus and possibly have it removed. When the records are being investigated, they have to be marked by the credit bureaus as being in dispute. This is what the term "dispute" usually refers to in the credit world.

Fred should check his credit reports today to see if the bill has been sent to collections. If not, he should work with the business to resolve the billing dispute. If the account is getting close to being sold to collections, it would probably be smart to pay it and then continue negotiations.