We get many tales of consumer disputes and a common situation we hear of us is where customers are dissatisfied with a product or service, refuse to pay until its fixed, and the business, usually a small business, threatens to “ruin” the customer’s credit score over the item. (For some reason, the word “ruin” is always used).

Now, FICO is notoriously cagey about what goes into the credit score black box but they have revealed the different factors that go into a score and their proportional influence. Payment history only accounts for 35% of your credit score. The “burn” from the dispute represents a then smaller part of that 35%. How big a threat are they making really? “I’m sorry, sir, we’re going to have to deny your mortgage. I can see here that you never returned Good Will Hunting.”

Don’t think it’s without repercussions, though. Your score dropping to 620 from 659 could result in $163 more monthly for a 30 year mortgage. However, the small amounts that we usually hear about being haggled over are unlikely to result in such major score shifts. If you’re not buying a house or a car or applying for a credit card anytime soon, you have even less to worry about.

Consider further that “dinging” your report, as it’s called, hurts the retailer too. We found information indicating it could cost at least $25 for a business to push through a negative onto your credit report. And while it’s a bit of a pain in the butt, it is possible to get negative items removed from your credit report.

Far be it from us to recommend payment delinquency, but oftentimes businesses using the, “I’m gonna RUIN your credit report” threat are just being bullies. A chuckle followed by a, “Is that all you got?” may be an appropriate response in these cases.

What’s In Your Score [myFICO]

RELATED:
Delete Negative Items From Your Credit Report
Credit Reports: How Long Different Items Stay
Don’t Pay For Your Credit Report
(Photo: Getty)

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.