While it is essential to build a good credit rating, that doesn’t mean that you have to pile up your debt and amass a lot of credit cards. In fact, money and finance gurus would advice the common person to throw away all but one of the (average of) nine credit cards in his/her wallet. There’s much more to credit establishment than simply amassing needless debt. Here are some ideas that would help you establish credit without drowning yourself in debt.

Create a good financial history by opening accounts in a good bank. Open a savings account and a checking account in your name.

Apply for just one credit card. Choose one that offers an attractive interest rate and doesn’t overcharge your for a annual membership fee. For more information, read our post on how to choose a credit card.

Want to make sound investments? If you have a good sum in the bank, then explore buying assets like real estate or jewelry. But don’t spend the money that you have. Keep them in a time deposit account to have it earn more interest. Apply for a loan payable in installments for at least a year to purchase those items. This way, you establish credit, make an investment, and have insurance for the items that you’re buying. But be sure to pay them on time.

If the bank isn’t quite sure if they will loan you money, ask a friend or family to co-sign it with you. However, do not, by all means, place your prized possessions (such as your home) as collateral especially if you’re not too sure about the future. Having a stable job is always the best insurance before going out and making a loan.

Remember that establishing credit is done over time. You can’t improve your credit rating by making huge loans in a small amount of time. It’s always good to take out small loans that you can easily manage.