a. Improve

Not likely. Try again.

b. Decrease

Correct. Most people find accounts on their credit report that are listed as open when in fact they haven't used them for a long time and don't intend to use them again. Credit cards, in particular, are rarely closed unless you specifically ask the lender to close them. You can call or write to the lender (the contact information should be listed on your credit report) and ask them to update your credit report to list the account closed at your request, and they must do so. Another alternative is to write to the credit reporting agency and ask to have the accounts listed as closed at your request.

But before you do that, keep in mind you may lower your credit score. If you really want to close out those accounts, do so slowly and selectively. Start with more recent ones, leave the oldest account open, and close retail cards before you close major credit cards.

Check out Union Plus myFICO credit tool discounts here. 

c. Stay the same

Not likely. Try again.

a. Promotional inquiries for pre-approved credit offers

True, but the correct answer is "All of the above."

b. Account review inquiries from your current lenders

True, but the correct answer is "All of the above."

c. Consumer-initiated inquiries, when you access your own credit report

True, but the correct answer is "All of the above."

d. All of the above

Correct. When any company requests your credit report, it creates an inquiry that is listed on your credit report. By law, the credit reporting agencies have to show you all inquiries on your credit report when you review it. But not all inquiries are shown to lenders or used to calculate your credit score.

"Soft" inquiries are the ones you'll see but no one else will if they order your credit report. Soft inquiries don't affect your credit score. They include those created when your credit is reviewed for pre-approved credit offers or monitored by your current lenders, as well as those created when you review your own credit report.

"Hard" inquiries are created when you apply for credit (including services such as cell phone or utility accounts). They do show up on credit reports supplied to lenders and affect your credit score. Inquiries count for a small part of a credit score, but it is a good idea to avoid multiple inquiries in a short period of time, especially if your credit isn't very strong.

Inquiries stay on your report for two years, though it's inquiries in the past year that most affect your credit.

a. Until it is paid in full

False. Try again.

b. Seven years from the date of last activity

False. Try again.

c. Seven years and six months from when you first fell behind

Correct. Collection or charge-off accounts can be reported for 7½ years from the date you first fell behind leading up to the collection or charge-off. It does not start when the account was placed for collection or from the date of last activity. This is true whether or not you pay off the collection account.

Example: You fell behind on a payment due January 1, 2000. The account was charged off for non-payment in June 2000. In December 2000, it was turned over to a collection agency. The 7½ year period starts January 2000, when you first missed that payment. The collection agency is required to report that January 1, 2000 date to the credit reporting agency so it won't be reported longer than it should be. This doesn't always happen, so be sure to check your credit report for that detail.

Tip: It's illegal for collection agencies to tell you they can report information forever if you don't pay.

d. Indefinitely if it is sold to another collection agency

False. Try again.

a. Must be notified in writing before the account is charged off or sent to collections

False. Try again.

b. Must worry about the debt affecting your credit report even if it is paid on time

Correct. You may want to help out a friend, child, relative or even employee by co-signing a loan for them. Think very carefully before you do. The main reason most people need a cosigner is because they have bad credit or no credit. If they don't manage the new loan well, the cosigner will suffer.

Lenders don't have to tell the cosigner in most cases that the loan they cosigned is not being paid on time. The cosigner may end up with a charge off, repossession or collection account on their credit report — sometimes without even knowing the loan was behind. If the primary borrower doesn't pay the loan, or files for bankruptcy and includes the debt, the cosigner is responsible for the entire loan plus collection costs.

Even if a cosigned account is always paid on time, the debt will count as your debt in your credit score. And if you apply for a loan, the loan officer may count that debt when figuring whether you have enough income to cover a new loan payment.

If you do co-sign a loan, make sure you monitor your credit report and step in immediately if the loan isn't paid on time.

c. Cannot be held responsible for the debt if the primary borrower includes the debt in bankruptcy

False. Try again.

d. None of the above

False. Try again.

a. 68 months and $1401.10 in interest

False. Try again.

b. 102 months and $2579.45 in interest

False. Try again.

c. 229 months and $3258.06 in interest

Correct. Small minimum payments can drag out your credit card debt for what seems like forever. If your balances aren't budging, visit UnionDebtHelp.org for advice and strategies to get out of debt. You'll also find the calculator used to create this example, which you can use to create repayment plan for your debts.

a. Yes

Not entirely correct. Try again.

b. No

Correct. This is a tricky question. It is a good idea to close joint accounts from future charges when you separate or divorce, but that doesn't get you off the hook for any current balances. Joint accounts assigned to your ex in divorce can be reported in both names until you close and pay off or refinance the account. Information from when the account was jointly held may still be reported for up to seven years if it is negative.

What's important to understand is that even if the divorce decree assigns the debt to your spouse, that doesn't relieve your responsibility for the debt to the lender. The divorce decree is an agreement between you and your ex. It doesn't erase your original contract with the lender in which you agreed to pay back the debt. It is very important, if at all possible, for spouses to refinance joint accounts in the responsible spouse's name only. Otherwise, monitor any remaining joint accounts each month to make sure they are paid on time. If not, talk to your attorney and consider making minimum payments to protect your credit while the matter is straightened out.

a. You accept the change in terms in writing and continue to use the card.

False. Try again.

b. It applies the new interest rate only to new purchases, not to existing balances.

False. Try again.

c. The card agreement contains a "default clause" that allows the issuer to raise your interest rate if you are late on that bill, or on any items that appear on your credit card.

Correct. Many consumers don't realize that a "fixed" credit card rate isn't the same as, say, a fixed-rate mortgage. In most states, card issuers can raise the interest rate on a fixed-rate credit card with just fifteen days' advance written notice. (This may change to 45 day's notice later in 2007.) The new rate can typically apply to existing balances as well as new purchases.

Many card issuers use a "universal default clause" which allows issuers to monitor you credit report and raise your rate if you are late on any bill that appears on your credit report — or simply if it looks like you have too much debt. In this case, because default clause is part of the credit card agreement, they don't have to give you advance notice and they don't have to give you the chance to opt out. Some of these default clauses are as high as 36.99%.

Tip: The Union Plus Credit Card does not have a universal default clause.

d. All of the above.

False. Try again.