$30 medical collection severely hurting credit

[Dylan B.]

Back in 2012 I had some lab work done, paid the co-pay and forgot about it. They apparently had the wrong address and were sending a $30 bill to it. 5 months later and they reported me to a collection agency who then calls me. I dispute the charge because I know I paid it months ago. I asked if it would hurt my credit score and they said no. They go off to talk to the lab who billed me who still claims that I owe the $30. I dispute it again and they said they will look into it more. 42 days after the initial filing they call back and still maintain that I owe the $30 so I just pay it so that they would leave me alone. Fast forward to today and I am trying to buy a house only to see that there is a negative collections on my credit report from this collections agency. I call them and they claim that there is nothing they can do. What are my options? Would a dispute potentially work? 

I was alerted to this by a potential lender for a house. The lender can see the collection and the amount it was for ($30) yet they choose to use the equifax report instead of transunion which does not have this collection on it and told me that it will hurt my rate. Is this lender not working in my best interest? The lender gave me all three of my credit scores and told me that they would use the bad one. Seems to me that anyone with a brain and good intentions would see that collection and ignore it. Only two of the lenders I have spoken with have brought up that issue.