That's not necessarily true. Editors who are aware of short markets may give less consideration to a writer who lists a publication in a market that has a poor reputation.
Now, by "less consideration," I'm not saying they're going to throw your (or indeed an unpublished person's) story out, and say, "Nay! Thou shalt not be considered!"
I mean what one of my well-published friends calls writer points.
Writer points are the amount of good will that you have with an editor or slush reader going into a story. If an editor picks up a properly formatted manuscript, with nice, dark, easy to read writing, that's professional-looking -- bang. That's writer points.
If you've been to a workshop that the editor has respect for, that's writer points. If your cover letter is pithy and grammatical, writer points. If your first sentence has good grammar, and perhaps even something intriguing about it, writer points.
If you can credit a pro market, writer points. If you can credit a non-pro, but good market, writer points. And so on.
And writer points can happen in reverse. Messy, unformatted manuscript. Negative writer points. Long, rambly cover letter with strange proclamations about the voices in your head that have told you to send out hte story. Negative writer points. First sentence with an unclear subject, no strong voice, and a cliche. Negative writer points.
Market that the editor has had a bad experience with, or knows isn't very discerning, negative writer points.
And this is all automatic and mostly subconscious, in the same way that when you as the reader pick up a magazine, you are more likely to be like "oooh, nice production values" and be more likely to persist through slightly boring content, whereas something printed in red ink on pink paper upside down is likely to have annoyed you before you begin reading.
To be frank, I'm not sure how much previous publicaiton credits matter at all. Others have said it, but I'll say it: I think the idea that you have to have a previous publication credit in order to be taken seriously is bupkiss.
If you can put Realms of Fantasy in your cover letter, you get a boost. If you put down a market that has no reputation or a poor reputation, why would you get a boost? The boost of Realms of Fantasy comes from the fact that the editor reading your manuscript knows you can produce excellent work that can get through a tough slush pile to catch the attention of an editor with a good reputation. Publishing with a market that has no prestige, or a negative reputation, is NOT going to count for the same thing. Putting ROF on your cover letter is, in a way, sort of like putting "was once endorsed by Shawna" on your cover letter (only in a polite fashion). That positive association isn't going to happen if the editor doesn't know and trust the person you were endorsed by.
If you have no credits in your cover letter, you can still look clean and professional. You may excite the idea of discovery in the editor -- that they could be the first to publish you.
Putting the name of a market that has no, or a negative, reputation, on your cover letter, on the other hand, MAY signal the editor "this writer can't sell their work to bigger markets." (Not all editors are the same, so it won't signal all editors this way.) It may signal "this is a persistent, dedicated writer, who perhaps isn't quite ready for the big leagues." It may signal nothing at all.
I don't mean that you shouldn't submit to low or no prestige markets if you want to. Assess your goals. If you want to reach readers with a story you don't think you can sell elsewhere, do it.
But I think it is fallacious to believe that it will help your career.
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In this note, I am speaking of markets generally. I am not talking about this particular market, of which I have no experience outside this message board.