[CA] Apt has sent me to collections over security deposit after ignoring my attempts to dispute

Tl;dr: apartment paid for excessive cleaning and charged me for it, ignored my attempts at a dispute, and then sent me to collections. I’m worried it’ll ruin my credit score.

Hello all. I lived in an apartment for 13 months in San Jose before moving out of state for a new job. I diligently cleaned, took before and after pictures, and followed their provided cleaning checklist. I left feeling that the apartment was in as good condition as when I moved in. In the lease, it stated a move out walkthrough inspection could be requested. I did that, but I was rejected over Covid concerns, even after I suggested they walk through while I wait outside.

I move and a few weeks later receive a letter from them stating they are keeping my security deposit ($500.00 USD) and also charging me an extra $200 for cleaning fees, painting, and carpet cleaning. They did include receipts of services that were performed, but I know the cleaning fees were outrageous and felt excessive. The lease discussed prorated paint fees, but they did not provide any explanation for why I was charged the amount I was.

I drafted up a dispute letter and sent it via certified mail, asking for money I felt should be returned to me, with before and after pictures. I did not receive a reply, and a few days after sending the letter, I get hit in a car accident (not at fault). Lo and behold, I start physical therapy, a new job, and learn a new town all while this is going down. My priorities were elsewhere. I figure they decided to keep the deposit and let the rest go. Silly me.

Over a year later with no communication, they send me a “final notice” about my outstanding fees, right around Thanksgiving. I immediately send them an email with the same letter, explaining I disputed these charges and never got a response. After a few days, I call. Allegedly, I spoke with the property manager who argued I didn’t clean behind the fridge ect (do they even clean behind the fridge? My dishwasher was nasty upon move in so unlikely). I argued very calmly and eventually he agreed to actually read my letter and get back to me by the end of the week via email, telling me he didn’t want to “shut me down before reading it”. I tried to enjoy a stress free holiday, but I still didn’t hear from them.

Fast forward to January, and I receive a letter from a collections agency in the apartment complexes name for the $200 plus a bit of interest. I’m at a loss of how to proceed and extremely frustrated they ignored all my attempts aside from when I called them directly. I’m extremely worried this will drastically impact my credit score, which is currently in good standing.

Is this something I dispute and take to small claims court? Do I even have a case? I’ve researched some mediators employed in that county, but I worry it’s too late for that. My pride will suffer, but I’m okay to pay the money if that’s the only way out. I care more about the negative effects it will have on my credit score.