If that's all you've got, not too bad. Need to check it out & treat it though. Scrape the bubbled paint off with a sharp knife, then scrape off the rust and sand it carefully until bright metal emerges. Use your rust treatment of choice, then touch in the paint. in that position it won't really show too much. What's the bike?

Its a Fuji Absolute frame. I was shocked when I first seen it, I thought the frame was history.

Nice frame, definitely worth looking after! No, you'd be surprised how bad surface rust can look, but when you get down to it is really superficial. I thought this 1966 Claud Butler 531 frame was probably a goner, but stripped it back to bare metal to check, A quick sanding with aluminium oxide paper and wire wool and no trace of rust remained. A quick home respray, new decals and it now looks like new. No need to go so drastic on yours, that's just a paint chip that' needs attention. Nowadays I cover such small chips with clear nail polish (borrowed from the wife!) to keep the water out.

https://i623.photobucket.com/albums/t...g?t=1291512859

https://s623.photobucket.com/albums/t...Road86ab_1.jpg

https://i623.photobucket.com/albums/t...g?t=1291512918

https://i623.photobucket.com/albums/t...g?t=1291513550

https://i623.photobucket.com/albums/t...g?t=1291513550

https://i623.photobucket.com/albums/t...kes/th_015.jpg

https://i623.photobucket.com/albums/t...kes/th_003.jpg

Nail polish is your friend, just prepare for the strange looks you'll get browsing the nail polish section....