Which action helps establish and maintain a good credit record?

Paying debts on time is a fundamental practice that significantly contributes to establishing and maintaining a good credit record. This action reflects responsible financial behavior and is closely monitored by credit bureaus when calculating an individual's credit score. A consistent history of timely payments demonstrates to lenders that a borrower is reliable and capable of managing their financial obligations, which improves their overall creditworthiness.

In contrast, applying for multiple loans at once may raise concerns for lenders, as it can signal financial instability or an increased risk to manage multiple debts simultaneously. Avoiding credit card use altogether can limit one's credit history; a lack of credit activity may hinder the development of a positive credit record since having a credit history is necessary for demonstrating creditworthiness. Taking large loans frequently can lead to an overextension of debt, which might negatively impact the ability to make timely payments and result in potential financial strain. Thus, timely payment of debts stands out as the best action for maintaining a positive credit history.