Mellody's Money Survival Guide: What Not to Do During a Credit Crisis

With the nation's financial crisis on everyone's minds, many Americans are worried about how to keep their money safe. Is this the time to move your cash?

In this edition of Mellody's Money Survival Guide, "Good Morning America" takes a look at the five things you should not do with your money right now.

Do you have a question for Mellody about your finances? Click here to email her a question.

Do Not Hide Your Money in a Mattress

When people panic, it's basically their brains saying, "There is danger. You have to do something." If, however, you have been prudent before the turbulence hit, the sensible thing may be to resist the urge to act.

Through Sept. 19, there have been just fewer than 20 banks that have "failed" in 2008. True, nobody would prefer to have their money in a bank that fails, but your money is safe.

The federal government created the FDIC, the Federal Deposit Insurance Corporation, in 1933 to backstop banks and prevent Americans from losing their money. Specifically, savings and checking accounts are insured to $100,000 per depositor in each bank or thrift (a savings and loan) that the FDIC insures.

So if you are one of the vast majority of Americans with less than $100,000 in the bank -- $200,000 if married -- then you simply don't need to fret should your bank get into trouble.

Do Not Go Another Day Without Checking Your Credit Report

Your credit score is the key piece of information that affects decisions on everything -- from whether or not you get a loan, credit card, home or job.

The national average is 676, but individual scores can range from 330 to 830 -- the higher the score, the lower the credit risk.

According to the Public Interest Research Group, one in four credit reports has errors that are serious enough to disqualify consumers from opening a bank account, purchasing a home or even getting a job.

The easiest way to obtain a free credit report is to log on to www.annualcreditreport.com

Additionally, you can obtain a copy of your report by calling the toll-free numbers of the respective big three: Equifax, Experian and Transunion.

You want to make sure everything on there is correct, from former addresses to current bills. This is necessary for everyone.

Do Not Be Shy About Talking to Creditors

Get on the phone now! Call your mortgage lender, call your bank, call your credit card company. No one wants you to default. If you fear you're falling behind, call them to try to work out a deal.

For credit card companies, see if you can get a lower percentage rate. Both your mortgage lender and credit card companies are going to be more willing to work with you now than they will be later.

Do Not Sell Your Stocks or Mutual Funds

Now is not a good time to sit on the sidelines when it comes to saving for retirement. As I have said time and time again, it is absolutely impossible to time the market. There have been a number of studies that have shown that the drawbacks from missing just a handful of the best days of the market far outweigh the benefits of missing the worst days.

Again, one of my favorite sayings is that bull markets always follow bears. You do not want to miss it on this rebound!

Do Not Be Late Paying Bills

First, pay what you can't live without. That's your mortgage or rent and utilities. Then you need to prioritize the other bills. Start with whichever ones have the highest interest rates and then go from there. Even paying a little on time is better than being late.

Mellody Hobson, president of Ariel Investments in Chicago, is "Good Morning America's" personal finance expert. Click here to visit her Web site, www.arielinvestments.com. Matthew Yale contributed to this report.

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