The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
A credit limit is the maximum amount of money a person can currently borrow from a financial institution.
Credit cards and lines of credit let us borrow funds from banks, credit unions and various companies. Credit limits determine just how much money we can borrow without incurring penalties like overdraft fees. Americans tend to gradually increase their credit limits as they age; Experian® reported that the average credit card limit for Generation Z in 2022 was $11,290, while the average credit limit for Baby Boomers was $40,318 that same year.
“What is a credit limit?” may be such a common question because multiple factors can influence a person’s limit. We’ll explore this question and discuss how to increase your credit limit.
Key takeaways:
Financial institutions largely set credit limits based on a borrower’s credit history.
Credit utilization is based on your credit limit and your available credit.
Regularly practicing good credit habits can increase your limit
Table of contents:
How are credit card limits determined?
Your credit limit is determined by the institution you borrow money from, whether they’re a bank, a credit union or a government agency. Credit limits take several factors into account, including your income and credit score. People with higher credit scores and income are normally approved for higher credit limits because lenders view them as financially responsible people.
Annual revenue
When a borrower applies for credit or asks for a credit limit increase, lenders look at annual revenue. From their perspective, a borrower with more income is more likely to make their payments on time—and vice versa.
Credit score
Credit scores help us qualify for auto loans, mortgage interest rates and credit cards—plus the limits we’ll receive when approved. If you have good credit, then you’ll likely be eligible for high-limit credit cards from the get-go.
Debt-to-income ratio
Lenders can use your debt-to-income ratio to set your credit limit by weighing your monthly debt payments against your total income. A low debt-to-income ratio can prompt lenders to offer higher credit limits since your spending habits show you regularly make responsible financial choices.
Employment status
Your employment status can also affect your credit limit largely due to timing. If you apply for a credit card or ask for a limit increase while you’re seeking a job, you’ll most likely receive a lower limit than you would as a full-time employee.
Credit limit vs. available credit
A person’s credit limit and their available credit are heavily tied together, which can cause people to confuse these two terms. To clarify, your available credit refers to the amount of money you can still borrow after calculating your debt. On the other hand, your credit limit refers to the total amount of money that your lender lets you borrow.
For example, if you have a $10,000 credit limit and spend $5,000, you’ll still have another $5,000 in available credit that you can access during this billing cycle. Your credit utilization ratio is calculated by weighing your available credit against your total credit limit. In this case, your credit utilization would be 50 percent.
How does your credit limit affect your credit score?
Whenever you ask a lender to increase your credit limit, they’ll perform a hard inquiry to review your credit history and help inform their decision. Inquiries briefly cause your score to dip, which is why conventional wisdom recommends not attempting to increase your credit limit right before applying for something vital—like a home or a new car.
Credit limits can also affect your score if you consistently have a high utilization ratio. Credit cards with high limits typically help borrowers maintain lower utilization ratios, which is beneficial for credit health.
What happens if you go over your credit limit?
Exceeding your credit limit can have negative consequences, especially if you do so repeatedly. Some of the drawbacks you might encounter include:
Account review: A lender may review your longtime credit habits, which could potentially lead to a credit limit reduction.
Credit score changes: Credit utilization makes up 30 percent of your FICO® credit score. Repeatedly going over your credit limit could significantly hurt your credit.
Increased interest rates: Depending on your lender’s policies, they may issue a penalty APR on the offending account, which can be much higher than your standard rate.
Overdraft fees: Most lenders will charge a $35 overdraft (or over-the-limit fee) after a specified time period if you don’t pay off your balance.
How to increase your credit limit
If you consistently make your monthly payments on time and keep your utilization low, the credit card issuer may approve your request to increase your limit. But remember to allow six to 12 months before asking. Your issuer probably won’t raise your limit after just one or two months of opening the account or if you’ve been making late payments.
Some credit card issuers will actively increase your limit after they review your account history. Sometimes, they’ll ask you to update your income. If you’ve earned a raise recently, you can provide that information, and the lender may increase your limit. When an issuer reviews your account like this, it does not cause a hard inquiry because you didn’t ask for them to review the account.
Work on your credit with Lexington Law Firm
Credit cards are fantastic resources that can positively impact your life when used responsibly. Even if you get approved for a high credit limit, it’s best to monitor your spending and borrowing habits. Lexington Law Firm offers great services like credit education tools and credit report analysis that may help you with your credit.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Brittany Sifontes
Attorney
Prior to joining Lexington, Brittany practiced a mix of criminal law and family law.
Brittany began her legal career at the Maricopa County Public Defender’s Office, and then moved into private practice. Brittany represented clients with charges ranging from drug sales, to sexual related offenses, to homicides. Brittany appeared in several hundred criminal court hearings, including felony and misdemeanor trials, evidentiary hearings, and pretrial hearings. In addition to criminal cases, Brittany also represented persons and families in a variety of family court matters including dissolution of marriage, legal separation, child support, paternity, parenting time, legal decision-making (formerly “custody”), spousal maintenance, modifications and enforcement of existing orders, relocation, and orders of protection. As a result, Brittany has extensive courtroom experience. Brittany attended the University of Colorado at Boulder for her undergraduate degree and attended Arizona Summit Law School for her law degree. At Arizona Summit Law school, Brittany graduated Summa Cum Laude and ranked 11th in her graduating class.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
VantageScore® 3.0 is a credit scoring model that each of the three major credit bureaus uses to determine your creditworthiness.
VantageScore 3.0 is a popular credit scoring model that helps to reflect a person’s creditworthiness. VantageScore® and the FICO® score model help banks and lenders determine if they’ll offer credit cards and loans to applicants.
Understanding the factors that lower and raise your VantageScore can qualify you for better opportunities in the future. We’ll explain what VantageScore 3.0 is and how it works so you can work to improve your credit.
Table of contents:
How does VantageScore 3.0 compare to other scoring models?
VantageScore 3.0 shares multiple similarities with other popular scoring models, including VantageScore 4.0 and several iterations of the FICO scoring model. There are also certain nuances that set each model apart when comparing VantageScore vs. FICO scoring models.
VantageScore 3.0 and VantageScore 4.0 place a heavy emphasis on a person’s payment history, and they place moderate emphasis on age and mix of credit and credit utilization rates. VantageScore 3.0 does focus more on a person’s total account balances, while VantageScore 4.0 is more concerned with new credit.
FICO scores differ from VantageScore in several ways. FICO scores need six months of account activity to generate credit scores, while VantageScores just need one. Vantage Scores generally take six categories into account, while FICO scores focus on 5. Otherwise, VantageScores and FICO scores both use 300 to 850 credit ranges—and the factors they use to calculate credit scores are generally similar.
How are Vantage credit scores calculated?
If you’ve ever asked yourself, “why are my credit scores different?” learning how a VantageScore is calculated may provide clarity.
Payment history makes up roughly 40 percent of your VantageScore and can significantly increase or decrease your score based on how timely you are with your payments.
The age of your credit and how diverse your credit profile is make up about 21 percent of your VantageScore. If you have a wide range of account types and consistently make positive actions with your oldest accounts, your VantageScore will likely steadily improve.
Credit utilization composes 20 percent of your VantageScore. Your credit utilization ratio is determined by weighing how much of your available credit you’re currently using.
Your brand-new credit accounts only make up five percent of your VantageScore.
The total amount of your account balances contributes roughly 11 percent to your VantageScore. This factor is also linked to your credit utilization ratio.
Available credit makes up about three percent of your VantageScore and generally reflects how much credit you’ve taken out.
The answer to “When do credit scores update?” is a bit complex. Credit scores are frequently updated, but there’s no preset date for these updates. It’s best to regularly check your credit scores and dispute any errors that you notice.
Vantage 3.0 credit ranges
Just like a FICO credit score, VantageScores can fall between 300 and 850. However, there are subtle differences between the credit score ranges of both models. For example, a FICO credit score of 780 would be considered “very good,” while a Vantage 3.0 credit score of 780 is simply considered “good.” Here’s a full breakdown of the VantageScore 3.0 credit score ranges.
Very poor: 300 – 600
Poor: 601 – 660
Fair: 661 – 720
Good: 721 – 780
Excellent: 781 – 850
5 ways to improve your VantageScore 3.0
Consistently practicing good financial habits can improve your VantageScore over time. The following tips can help you work on poor credit and eventually reach and maintain higher scores.
1. Don’t apply for too much new credit
Each time you apply for credit, creditors will enact a hard inquiry on your account that temporarily lowers your score. If you apply for too much new credit within a set period, your credit score may sharply decline.
2. Pay down credit card balances
Account balances compose 11 percent of your VantageScore, so paying down your debt can positively impact your credit. Lowering your account balances will also improve your credit utilization ratio, especially if you target your largest balances first.
3. Try to make your payments on time
Since payment history makes up 40 percent of your VantageScore, this step’s importance can’t be understated. Strive to make all of your payments on time. Even if you can only make the minimum payment or have to pay within the grace period, you’ll still maintain good standing with your creditors.
4. Maintain your oldest accounts
Taking positive actions on your oldest accounts will have a greater impact than activity on your newer accounts. Remember that merging your oldest accounts can drastically lower your score if you ever consider using a debt consolidation service.
5. Sign up for a credit monitoring service
A credit monitoring service can maintain watch on your credit reports and clue you into any fluctuations or inconsistencies. Lexington Law Firm offers comprehensive credit monitoring services that can help you take positive steps toward improving your credit.
How can I monitor my VantageScore?
You can monitor your VantageScore by reaching out to the three credit bureaus and requesting a free credit report. You can also capitalize on credit monitoring services like the products offered by Lexington Law Firm. Get your free credit assessment today.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Paola Bergauer
Associate Attorney
Paola Bergauer was born in San Jose, California then moved with her family to Hawaii and later Arizona.
In 2012 she earned a Bachelor’s degree in both Psychology and Political Science. In 2014 she graduated from Arizona Summit Law School earning her Juris Doctor. During law school, she had the opportunity to participate in externships where she was able to assist in the representation of clients who were pleading asylum in front of Immigration Court. Paola was also a senior staff editor in her law school’s Law Review. Prior to joining Lexington Law, Paola has worked in Immigration, Criminal Defense, and Personal Injury. Paola is licensed to practice in Arizona and is an Associate Attorney in the Phoenix office.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
If you overpay your credit card, you won’t lose the money, and your credit won’t take a hit. You’ll just have a negative credit card balance, which you can use toward future purchases, or you can request a credit balance refund.
With so many things to keep track of in your financial life, it can be easy to make an occasional mistake. And while mistakes like a late payment can have negative effects on your credit health, there are other slip-ups that aren’t necessarily a bad thing—and overpaying your credit card is one of them.
If you overpay your credit card, perhaps due to an automatic payment and a manual payment overlapping, there’s no need to worry. You won’t lose the money, and your credit score won’t take a hit. You’ll know you’ve overpaid if you have a negative credit card balance.
What is a negative credit card balance?
A negative card balance means that something has happened to cause your balance to dip below zero. Your first thought may be that something is wrong—but a negative balance means that your credit issuer owes you money.
Common ways negative balances happen
Negative credit card balances are fairly common and are nothing to fret over. If you notice a negative balance, you may wonder what triggered it. Below are five common causes.
Your manual payments and autopay overlapped. If you manually paid an amount greater than your balance, you would have a negative balance. Alternatively, if you made a payment around the same time that an automatic payment happened, your balance could dip below zero.
You received a refund on a purchase. If you made a purchase with your credit card and then paid off your full balance, you would show a balance of $0. If you then returned the purchase and received a refund on the card, you would have a negative balance.
You earned rewards or statement credits. Some credit card companies offer welcome bonuses or cashback rewards in the form of statement credits. If you received credit when your balance was already zero, you would have a negative balance.
You reversed fraudulent charges. If you were the victim of credit card fraud or someone used your card without authorization, your card issuer would reverse the transaction. This could result in a negative balance, depending on how much was charged and your previous balance. If the fraud is reflected on your credit report, you can address it by filing a dispute.
You negotiated fees. If you can successfully negotiate with your credit card issuer to waive fees, you may end up with a negative balance if you’ve already paid off those charges.
What to do if you overpay your credit card
No matter the cause of your negative balance, you have two options:
Do nothing. Any future purchases you make will bring your account back to positive. If you don’t make any purchases on the card after six months, creditors must refund the full negative balance.
Request a credit balance refund from your credit card issuer. Since a negative balance means the credit issuer owes you money, many people opt to file for a refund to bring their account back to zero.
How to submit a credit refund request
Each credit card issuer has its own policy on how credit balance refunds work, so check with your financial institution for step-by-step instructions.
Typically, you can request a credit refund online, via mail or over the phone. A refund may be issued as cash, check, direct deposit or money order.
The Federal Trade Commission requires creditors to send you a credit refund within seven business days of receiving a written request. If you haven’t heard from them after seven days, follow up to ensure it was issued and processed correctly.
Fraud triggers
While credit balance refunds are usually executed without difficulty, there may be instances where your financial institution is suspicious of fraud. This typically happens if the negative balance is significant—like if you added an extra zero to your payment amount.
Large negative balances are a warning signal of refund fraud or money laundering. To combat this, creditors may freeze your account or even shut it down as a measure of consumer protection. If fraud is suspected due to a mistake, it may cause some inconvenience.
As soon as you become aware of a large negative balance, call your credit card company and explain the mistake. They’ll make your account right again.
How overpaid balances show up on your credit report
A negative credit card balance isn’t bad for your credit. In fact, it doesn’t show up on your credit report at all, so the three major credit bureaus will never know you have a negative balance—it will simply show up as zero.
Perhaps more important than the balance itself is the credit utilization rate. According to FICO®, this plays into the “amounts owed” category of your credit score, which accounts for 30 percent of the total score. When you have a negative balance, your utilization rate is zero percent, which works in your favor—typically, the lower your utilization rate is, the better.
4 tips to prevent overpaying your credit card balance
While there’s virtually no harm in overpaying your credit card balance, it may be a hassle to request a balance refund in the event of overpayment. Also, dealing with potential fraud triggers could prove frustrating. Here are four tips to help you avoid overpaying your credit card balance.
1. Check your statements regularly
Checking your credit card statement and knowing your balance is a great way to ensure you won’t overpay your credit card balance. Carefully review your statement before making a payment and note if there are any discrepancies.
Returns and refunds can also result in overpayment if they come through after you pay off the balance, so make sure you check that for any recent refunds.
2. Set up automatic payments
Automatic payments are extremely helpful—especially for avoiding late fees. Often, you can set up an automatic payment for a specific amount or to pay off the current balance. Just ensure you have enough in your checking account to cover the payment to avoid overdraft.
3. Avoid manual payments right before a scheduled payment
Manual payments that are soon followed by automatic payments can result in an overpayment. If possible, consider waiting until the automatic payment goes through and then pay the remaining balance.
4. Use account alerts
Banking and credit card companies often allow you to set up automatic alerts based on specific criteria. These alerts can come as a text, email or phone notification. You may consider setting up an alert when your card balance reaches a specific threshold.
Negative credit balance FAQ
There tends to be a bit of confusion related to negative credit card balances that may cause people to purposefully overpay in hopes of receiving a benefit. Let’s answer the following commonly asked questions to clear up any misconceptions.
Will overpaying my credit card increase my credit score?
Overpaying has no more impact on your credit score than paying the full balance does. Paying down your credit card to a zero balance is good for your credit, but you won’t see an extra boost by purposefully overpaying because it will still show up as a zero balance on your credit report.
If you’re looking to improve your credit score, try these tips:
Make all loan and credit card payments on time
Lower your credit utilization
Avoid closing old credit cards (even if you don’t use them)
Open a secured credit card
Become an authorized user on the credit card of someone with good credit
Apply for a credit building loan
Consider sending a pay for delete letter
Dispute inaccuracies on your credit report
Include rent and utilities on your credit report
Will overpaying my credit card increase my credit limit?
While having a negative balance may provide a little extra wiggle room for a future large purchase, it won’t increase your actual credit limit. If you have a balance of negative $100 on a card with a limit of $3,000, your official limit is still $3,000—it will just take you a bit longer to reach that limit since you have a $100 credit.
If you’d like to increase your credit card limit, try one of these three options:
Apply for a new credit card with a higher limit.
Request a higher limit from your credit card issuer.
Check to see if your credit card issuer will automatically boost your limit in the future.
Does overpaying my credit card allow me to profit from interest?
Overpaying your credit card isn’t the same as depositing money into an interest-earning savings account. You don’t earn interest on a negative credit balance—the money simply sits there until it is refunded or until purchases bring the account back to a positive balance.
Take control of your credit today
Lexington Law Firm has a team that can help you understand your credit and address any errors that may be negatively affecting it. Lexington Law Firm also offers continuous credit monitoring services to protect you from fraud and credit-related discrepancies. Ready to take control of your credit? Learn how we can help by getting your free credit assessment today.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Sarah Raja
Associate Attorney
Sarah Raja was born and raised in Phoenix, Arizona.
In 2010 she earned a bachelor’s degree in Psychology from Arizona State University. Sarah then clerked at personal injury firm while she studied for the Law School Admissions Test. In 2016, Sarah graduated from Arizona Summit Law School with a Juris Doctor degree. While in law school Sarah had a passion for mediation and participated in the school’s mediation clinic and mediated cases for the Phoenix Justice Courts. Prior to joining Lexington Law Firm, Sarah practiced in the areas of real property law, HOA law, family law, and disability law in the State of Arizona. In 2020, Sarah opened her own mediation firm with her business partner, where they specialize in assisting couples through divorce in a communicative and civilized manner. In her spare time, Sarah enjoys spending time with family and friends, practicing yoga, and traveling.
Top-10 mortgage lender Guaranteed Rate has filed a lawsuit against retail rival New American Funding over poaching. But this isn’t your standard poaching lawsuit: G-Rate alleges that NAF has wooed at least 30 employees since early 2023 via illegal loan officer compensation practices.
Despite the rise in poaching lawsuits in a competitive market, it’s the first time a large lender has publicly accused a competitor of violating the LO comp rule by allowing their salesforce to manipulate lead sources in order to reduce their rates and win more loans.
Industry experts told HousingWire for a December feature that the manipulation of lead sources is widespread among retail lenders, and there’s no enforcement.
Tara Castrejon, director of content marketing and public relations at NAF, said in an emailed response to HousingWire that the company does not comment on pending litigation.
A spokesperson for G-Rate did not immediately respond to a request for comments.
“Since February 2023, NAF has unlawfully raided GR’s branches nationwide, poaching over 30 GR employees from coast-to-coast,” the lawsuit states. “To achieve its goals, NAF uses illegal compensation practices to induce GR employees to resign from GR and join NAF, and incentivizes and encourages GR employees to solicit and recruit other GR employees to defect to NAF.”
The lawsuit, which seeks injunction relief and damages, was filed on Dec. 26 in the Circuit Court of Cook County, Illinois. G-Rate claims, among other accusations, tortious interference, violation of Illinois deceptive trade practice laws and misappropriation of confidential information.
NAF zeroed in on employees in Washington, Arizona, Texas, Georgia, Missouri, Florida, and Illinois, the lawsuit states. The departing employees included a divisional manager, branch and regional managers, and loan officers.
G-Rate claims that it all started when Gregory Griffin, a former regional manager and senior vice president of strategic growth, joined NAF as regional manager of strategic growth, where he was responsible for recruiting in the Midwest Region. Griffin had a “non-solicitation” agreement with his former employer, G-Rate claims.
“After Mr. Griffin’s hiring by NAF in January 2023, the dam broke, and NAF began to aggressively recruit and hire from GR. Prior to this point, NAF had not been able to successfully recruit from GR on such a massive scale,” the lawsuit states.
Griffin did not immediately return to a request for comments.
The lawsuit says that former employees who transitioned to NAF sent borrowers’ information to their emails, including pay stubs and bank statements. G-Rate’s research on publicly available data on closed loans shows “numerous customers took their business from GR to NAF in conjunction with the employee defections to NAF,” it says.
Claims re LO comp rule violations
Among the more explosive claims is that NAF repeatedly violated Regulation Z, which prohibits loan officers from receiving payments based on the “terms of a transaction” other than the amount of credit extended.
The rule also prohibits reductions in LO comp to fund pricing concessions to consumers at the expense of the loan officer, which would be characterized as a change in transaction terms.
G-Rate claims NAF does not pay LOs “a fixed percentage of the loan amount or any other type of compensation permitted by applicable law and regulations.” Instead, the company supposedly offers different pricing buckets based on the source lead and allows LOs to play with them.
“Should the consumer dislike the loan pricing first offered using the ‘self-generated’ ‘bucket,’ the loan officer can freely switch the ‘bucket’ to ‘corporate generated’ or ‘connected generated’ instead, which, in turn, corresponds to lower compensation for the loan officer,” the lawsuit states.
“The lower ‘bucket’ results in new, lower pricing to the consumer. If the consumer likes the new pricing, and NAF ‘wins the deal’ with its lower pricing, the loan officer reduces the loan officer’s compensation to provide the consumer with a discount. Put another way; the loan officer is allowed to later (and falsely) change the source of the lead, allowing for lower loan officer compensation and a pricing advantage for NAF over competitors like GR. This approach is illegal.”
G-Rate claims the practice has caused millions of dollars in lost revenues, investment and future business opportunities. It also says NAF misrepresented to potential recruits that its illegal compensation arrangements were “audited” and approved by the Consumer Financial Protection Bureau (CFPB).
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
The lowest possible credit score is 300 for FICO® and VantageScore®. Your credit score doesn’t start at 300, but it can drop due to negative marks on your credit report.
The average credit score in the United States was 716 as of 2022, according to Experian®, and this is a credit score that many people would be happy to have. Using the FICO® score range, 714 falls within the “good” range, but what is the lowest credit score?
There’s a common misconception that the credit score you start with is zero, but that’s not the case. Today, you will learn what the lowest credit score is and the factors and situations that affect your score. Most importantly, we’ll give you some tips to potentially improve your credit, which could save you money and give you more access to lines of credit and loans.
What’s the lowest credit score?
A 300 credit score is the lowest credit score you can have, but this isn’t necessarily the score that you start with. You don’t get a credit score until you have a bill reported to the major credit bureaus. If you’re making your payments on time, you may have a credit score that starts in the 600s. Typically, if you have the lowest credit score of 300, there are negative marks on your credit report that are lowering your score.
Your credit score may differ depending on which scoring model you’re looking at. While the most popular scoring model is FICO, there is also VantageScore®. Both scoring models have a total scale of 300 to 850, so the lowest possible credit score is 300 for both models.
Using the table below, you’ll notice that the ranges are slightly different, but they use a scale of 300 to 840.
FICO
VantageScore
300 – 579 (Poor)
300 – 499 (Very poor)
580 – 669 (Fair)
500 – 600 (Poor)
670 – 739 (Good)
601 – 660 (Fair)
740 – 799 (Very good)
661 – 780 (Good)
800 – 850 (Exceptional)
781 – 850 (Excellent)
5 reasons people have low credit scores
As mentioned, it’s a misconception that your credit score starts at zero. In reality, some derogatory marks can lower your credit score to 300. Your credit score comprises different factors like your payment history, debt, credit age, new credit inquiries and mix of credit types. In many cases where a person has a low credit score, they’re taking actions that negatively affect the five main factors that determine a credit score.
Your credit score is a simplified way for lenders to assess risk. Negative marks on your credit may be a red flag to lenders that you are not capable of paying back a loan. Some of the most common reasons people have low credit scores include:
Poor payment history: Your payment history makes up 35 percent of your credit score, so missing payments and late payments can lower your score significantly.
Collection accounts: When you stop making payments on an account, the lender can sell your debt to a collection agency. This can negatively affect your score for up to seven years.
Bankruptcies and foreclosures: Depending on which type of bankruptcy you file, it can hurt your credit for the next seven to 10 years. Foreclosures stay on your credit report for seven years, according to the Consumer Financial Protection Bureau.
Too many hard inquiries: Each time you apply for a credit card or other services that run a hard inquiry on your credit report, it can hurt your credit.
Errors on your credit report: Sometimes, lenders or other businesses that report to the credit bureaus make mistakes. For example, they may say that you missed a payment. If this happens, you can dispute the errors and potentially help your credit.
Keep in mind that some of the above will hurt your credit more than others.
6 tips to improve your low credit
Achieving the max credit score of 850 is difficult and takes time, but it’s an attainable goal for everyone to improve their low credit. You can improve your low credit with some simple steps and good habits. Even if you have the lowest credit score of 300, over time, you can raise your score to good or even excellent.
Pay off collection accounts: One of the first things you can do to work on your score is to pay off your collection accounts. These hurt your credit quite a bit, so paying them off helps. When you do this, be sure to send a pay-for-delete letter to potentially have the negative mark removed from your report.
Address errors on your report: If there is an error on your credit report, disputing the error may get it removed from your report and improve your score.
Set up automatic payments: Making your payments on time should help improve your credit. Even if you pay just the minimum on your credit cards, on-time payments are beneficial. If you have the funds, you can make additional payments to pay down your debt faster as well.
Keep your credit utilization low: Your credit utilization is the amount that you owe compared to your total credit limit. Ideally, you want this below 30 percent. For example, if you have a $1,000 credit limit, you wouldn’t want to owe more than $300.
Monitor your credit: A great way to work on your score is to check your credit regularly. This can alert you to errors and allow you to adjust your behaviors if you see your credit dip. This is also a great way to stay motivated as you see your credit begin to improve.
Apply for more lines of credit: Yes, applying for too many lines of credit can hurt your score, but you can apply strategically. Having more lines of credit increases your max credit limit and can lower your credit utilization. This also helps with improving your credit age and payment history if you make your payments on time.
Don’t let errors harm your credit
Errors on your credit report can be frustrating and difficult to navigate when you’re dealing with the major credit bureaus. While you can do it on your own, help is available. If you have a low credit score due to errors on your credit report, you don’t have to go through the credit repair process alone. Lexington Law Firm has helped thousands of people repair their credit and has sent out over 221 million credit challenges since 2004. We have a team of credit professionals who are here to help you with your credit by challenging the credit bureaus on your behalf while also providing other services like credit monitoring. To get started, sign up today.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Nature Lewis
Associate Attorney
Before joining Lexington Law as an Associate Attorney, Nature Lewis managed a successful practice representing tenants in Maricopa County.
Through her representation of tenants, Nature gained experience in Federal law, Family law, Probate, Consumer protection and Civil law. She received numerous accolades for her dedication to Tenant Protection in Arizona, including, John P. Frank Advocate for Justice Award in 2016, Top 50 Pro Bono Attorney of 2015, New Tenant Attorney of the Year in 2015 and Maricopa County Attorney of the Month in March 2015. Nature continued her dedication to pro bono work while volunteering at Community Legal Services’ Volunteer Lawyer’s Program and assisting victims of Domestic Violence at the local shelter. Nature is passionate about providing free knowledge to the underserved community and continues to hold free seminars about tenant rights and plans to incorporate consumer rights in her free seminars. Nature is a wife and mother of 5 children. She and her husband have been married for 24 years and enjoy traveling internationally, watching movies and promoting their indie published comic books!
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
A credit freeze is a free way to restrict access to your report, and federal law requires credit bureaus to offer it. A credit lock is a premium offering from credit bureaus, and the main advantage is that you can lock and unlock your report instantly.
In 2022, public data breaches exposed over 20 billion records, allowing bad actors to access sensitive financial information. While credit freezes and credit locks both help you protect your credit report, there are important differences. A credit lock is a premium offering from credit bureaus that you can lock and unlock your report instantly. A credit freeze is free but less convenient, and federal law requires credit bureaus to offer it.
Credit freezes and credit locks are useful ways of deciding who can access your credit report. Understanding the differences between these two methods of credit report protection can help you decide which is the best fit for your situation.
The three main credit bureaus—TransUnion®, Experian® and Equifax®—offer both credit freezes and credit locks to everyone with a credit report.
Read on to learn more about the differences between a credit lock vs. freeze and how each of these works.
Table of contents:
What is a credit freeze?
A credit freeze is a free, secure way to restrict access to your credit report. Placing a freeze on your credit prevents anyone from opening up a new credit account using your information without your permission.
Because a credit freeze blocks new credit under your name, it’s a strong protection against fraud, especially for victims of identity theft.
The option to freeze your credit is a protected right under federal law, so TransUnion®, Experian® and Equifax® must provide this service to you at no cost. Additionally, they have to place the freeze within one business day.
Learn more about how to freeze and unfreeze your credit below.
How to freeze your credit
You can freeze your credit over the phone, online or by mail. However, you’ll need to request a credit freeze at each credit bureau, which means contacting TransUnion, Experian and Equifax separately. After verifying your identity and freezing your credit, you’ll receive a secure Personal Identification Number (PIN) that you’ll need when you’re ready to unfreeze it. You can still check your credit score when your account is frozen, and your existing creditors can also review your file.
In general, a credit freeze lasts until you choose to unfreeze it, but this varies in several states, so be sure to check applicable laws in your area.
Take action: Read our detailed guide about how to freeze your credit with each of the three credit bureaus, with simple steps for making requests over the phone, online or by mail.
How to unfreeze your credit
You can unfreeze your credit by making a request with the credit bureaus and providing your secure PIN. This step also requires proof of your identity, which you can provide over the phone, online or by mail.
You can permanently unfreeze your credit, unfreeze your credit for a specific amount of time or unfreeze your credit only for a specific creditor.
Federal law requires credit bureaus to process your request within one hour if you ask them to unfreeze your credit online or over the phone. On the other hand, requests via mail may take up to three days after receipt before they are processed.
Take action: Read our detailed guide to learn how to unfreeze your credit with each of the three credit bureaus, including information about requests over the phone, online or by mail.
Is there a downside to freezing your credit?
Freezing your credit is a straightforward way to lower the risk of bad actors opening any new credit accounts with your information. That said, when you want to open a new account yourself, you’ll need to go through the process of unfreezing your account before you can do so. Though credit freezes are impactful in preventing identity theft, the planning they require can be inconvenient.
If you’re looking for a more immediate way to restrict and allow access to your credit, a credit lock may be a better option.
What is a credit lock?
A credit lock is a premium offering from the credit bureaus that provides a more immediate method for allowing and restricting access to your credit information.
Like with credit freezes, you must request separate credit locks from each credit bureau. But credit locks aren’t protected by federal law and often entail a monthly fee, so you should read the agreement with each credit bureau carefully.
A credit lock enables you to lock and unlock your credit immediately using a website or app. This means that you can keep your account locked most of the time, but when you need to unlock it—for instance, when getting a credit card or taking out a personal loan—you don’t have to wait.
How to lock your credit
You can lock your credit by signing up for a premium credit lock service with all three credit bureaus: TransUnion, Experian and Equifax.
Take action: Learn more about these products’ costs and specific features by visiting each bureau’s website. Equifax offers its Lock & Alert service, Experian provides CreditLock and TransUnion bundles a credit lock option with its Credit Monitoring service.
Should you use a credit freeze or a credit lock?
Deciding between a credit freeze vs. lock depends on your particular circumstances and needs.
A credit freeze has the advantage of being free and backed by federal law. On the other hand, unfreezing credit takes some time, which can be inconvenient. A credit lock enables you to instantly lock and unlock your credit accounts, but it typically involves a monthly fee and may offer fewer legal protections.
No matter what you choose, both credit freezes and credit locks are valuable tools for protecting your identity. If you have been the victim of identity theft, you may have inaccurate items on your credit report. Get your free credit assessment at Lexington Law Firm to ensure your report is accurate and your identity is safe.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Vince R. Mayr
Supervising Attorney of Bankruptcies
Vince has considerable expertise in the field of bankruptcy law.
He has represented clients in more than 3,000 bankruptcy matters under chapters 7, 11, 12, and 13 of the U.S. Bankruptcy Code. Vince earned his Bachelor of Science Degree in Government from the University of Maryland. His Masters of Public Administration degree was earned from Golden Gate University School of Public Administration. His Juris Doctor was earned at Golden Gate University School of Law, San Francisco, California. Vince is licensed to practice law in Arizona, Nevada, and Colorado. He is located in the Phoenix office.
PHOENIX — The average long-term U.S. mortgage rate retreated for the ninth straight week to its lowest level since May.
The average rate on a 30-year mortgage dipped to 6.61% from 6.67% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.42%.
Mortgage rates have been easing since late October, when the average rate on a 30-year home loan reached 7.79%, the highest level since late 2000. The sharp runup in mortgage rates that began early last year has pushed up borrowing costs on home loans, discouraging both buyers and sellers from jumping into the market.
If you spent your teenage years waiting anxiously for one of your siblings to get out of the shower, the idea of selling your spacious, multi-bathroom home and moving into a smaller house or condo may feel like a reversal of fortune.
Yet for many retirees, downsizing makes financial and practical sense. Younger baby boomers — those currently ranging in age from 57 to 66 — made up 17% of recent home buyers, while older boomers — ages 67 to 75 — accounted for 12%, according to a 2022 report from the National Association of Realtors Research Group. Boomers’ primary reasons for buying a home were to be closer to friends and family, as well as a desire to move into a smaller home, the report said. Both younger and older boomers were more likely than others to purchase a home in a small town, and younger boomers were the most likely to buy in a rural area.
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For retirees Fred and Shelby Bivins, selling their home in Green Valley, Ariz., will enable them to realize their dream of traveling in retirement. The Bivinses have put their 2,050-square-foot Arizona home on the market and plan to relocate to their 1,600-square-foot summer condo in Fish Creek, Wis., a small community about 50 miles from Green Bay. They plan to live in Wisconsin in the spring and summer and spend the winter months in a short-term rental in Arizona, where they have family.
Fred, 65, says the decision to downsize was precipitated by a two-month stay in Portugal last year, one of several countries they hope to visit while they’re still healthy enough to travel. “We’ve had Australia and New Zealand on our list for many years, even when we were working,” says Shelby, 68. The Bivinses are also considering a return visit to Portugal. Eliminating the cost of maintaining their Arizona home will free up funds for those trips.
With help from Chris Troseth, a certified financial planner based in Plano, Texas, the Bivinses plan to invest the proceeds from the sale of their home in a low-risk portfolio. Once they’re done traveling and are ready to settle down, they intend to use that money to buy a smaller home in Arizona. “Selling their primary home will generate significant funds that can be reinvested to support their lifestyle now and in the future,” Troseth says. “Downsizing for this couple will be a positive on all fronts.”
Challenges for downsizers
For all of its appeal, downsizing in today’s market is more complicated than it was in the past. With 30-year fixed interest rates on mortgages recently approaching 8%, many younger homeowners who might otherwise upgrade to a larger home are unwilling to sell, particularly if it means giving up a mortgage with a fixed rate of 3% or less. More than 80% of consumers surveyed in September by housing finance giant Fannie Mae said they believe this is a bad time to buy a home and cited mortgage rates as the top reason for their pessimism. “This indicates to us that many homeowners are probably not eager to give up their ‘locked-in’ lower mortgage rates anytime soon,” Fannie Mae said in a statement. As a result, buyers are competing for limited stock of smaller homes, says Hannah Jones, senior economic research analyst for Realtor.com.
Here, though, many retirees have an advantage, Jones says. Rising rates have priced many younger buyers out of the market and made it more difficult for others to obtain approval for a loan. That’s not an issue for retirees who can use proceeds from the sale of their primary home to make an all-cash offer, which is often more attractive to sellers.
Retirees also have the ability to cast a wider net than younger buyers, whose choice of homes is often dictated by their jobs or a desire to live in a well-rated school district. While the U.S. median home price has soared more than 40% since the beginning of the pandemic, prices have risen more slowly in parts of the Northeast and Midwest, Jones says. “We have seen the popularity of Midwest markets grow over the last few months because out of all of the regions, the Midwest tends to be the most affordable,” she says. “You can still find affordable homes in areas that offer a lot of amenities.”
Meanwhile, selling your home may be somewhat more challenging than it was during the height of the pandemic, when potential buyers made offers on homes that weren’t even on the market. The Mortgage Bankers Association reported in October that mortgage purchase applications slowed to the lowest level since 1995, as the rapid rise in mortgage rates has pushed many potential buyers out of the market. Sales of previously owned single-family homes fell a seasonably adjusted 2% in September from August and were down 15.4% from a year earlier, according to the National Association of Realtors. “As has been the case throughout this year, limited inventory and low housing affordability continue to hamper home sales,” NAR chief economist Lawrence Yun said in a statement.
However, because of tight inventories, there’s still demand for homes of all sizes, Jones says, so if your home is well maintained and move-in ready, you shouldn’t have difficulty selling it. “The market isn’t as red-hot as it was during the pandemic, but there’s still a lot to be gained by selling now,” she says.
Other costs and considerations
If you live in an area where real estate values have soared, moving to a less expensive part of the country may seem like a logical way to lower your costs in retirement. While the median home price in the U.S. was $394,300 in September, there’s wide variation in individual markets, from $1.5 million in Santa Clara, Calif., to $237,000 in Davenport, Iowa. But before you up and move to a lower-cost locale, make sure you take inventory of your short- and long-term expenses, which could be higher than you expect.
Selling your current home, even at a significant profit, means you will incur costs, including those to update, repair and stage it, as well as a real estate agent’s commission (typically 5% to 6% of the sale price). In addition, ongoing costs for your new home will include homeowners insurance, property taxes, state and local taxes, and homeowners association or condo fees.
Nicholas Bunio, a certified financial planner in Berwyn, Pa., says one of his retired clients moved to Florida and purchased a home that was $100,000 less expensive than her home in New Jersey. Florida is also one of nine states without income tax, which makes it attractive to retirees looking to relocate. Once Bunio’s client got there, however, she discovered that she needed to spend $50,000 to install hurricane-proof windows. Worse, the only home-owners insurance she could find was through Citizens Property Insurance, the state-sponsored insurer of last resort, and she’ll pay about $8,000 a year for coverage. Her property taxes were higher than she expected, too. When it comes to lowering your cost of living after you downsize, “it’s not as simple as buying a cheaper house,” Bunio says
Before moving across the country, or even across the state, you should also research the availability of medical care. “Oftentimes, those considerations are secondary to things like proximity to family or leisure activities,” says John McGlothlin, a CFP in Austin, Texas. McGlothlin says one of his clients moved to a less expensive rural area that’s nowhere near a sizable medical facility. Although that’s not a problem now, he says, it could become a problem when they’re older.
If you use original Medicare, you won’t lose coverage if you move to another state. But if you’re enrolled in Medicare Advantage, which is offered by private insurers as an alternative to original Medicare, you may have to switch plans to avoid losing coverage. To research the availability of doctors, hospitals and nursing homes in a particular zip code, go to www.medicare.gov/care-compare.
At a time when many seniors suffer from loneliness and isolation, a sense of community matters, too. Bunio recounts the experience of a client who considered moving from Philadelphia to Phoenix after her daughter accepted a job there. The cost of living in Phoenix is lower, but the client changed her mind after visiting her daughter for a few months. “She has no friends in Phoenix,” he says. “She’s going on 61 and doesn’t want to restart life and make brand-new connections all over again.”
Time is on your side
Unlike younger home buyers, who may be under pressure to buy a place before starting a new job or enrolling their kids in school, downsizers usually have plenty of time to consider their options and research potential downsizing destinations. Once you’ve settled on a community, consider renting for a few months to get a feel for the area and a better idea of how much it will cost to live there. Bunio says some of his clients who are behind on saving for retirement or have high health care costs have sold their homes, invested the proceeds and become permanent renters. This strategy frees them from property taxes, homeowners insurance, homeowners association fees and other expenses associated with homeownership
The boom in housing values has boosted rental costs, as the shortage of affordable housing increased demand for rental properties. But thanks to the construction of new rental properties in several markets, the market has softened in recent months, according to Zumper, an online marketplace for renters and landlords. A Zumper survey conducted in October found that the median rent for a one-bedroom apartment fell 0.4% from September, the most significant monthly decline this year.
In 75 of the 100 cities Zumper surveyed, the median rent for a one-bedroom apartment was flat or down from the previous month. (For more on the advantages of renting in retirement, see “8 Great Places to Retire—for Renters,” Aug.)
Aging in place
Even if you opt to age in place, you can tap your home equity by taking out a home equity line of credit, a home equity loan or a reverse mortgage. At a time when interest rates on home equity lines of credit and loans average around 9%, a reverse mortgage may be a more appealing option for retirees. With a reverse mortgage, you can convert your home equity into a lump sum, monthly payments or a line of credit. You don’t have to make principal or interest payments on the loan for as long as you remain in the home.
To be eligible for a government-insured home equity conversion mortgage (HECM), you must be at least 62 years old and have at least 50% equity in your home, and the home must be your primary residence. The maximum payout for which you’ll qualify depends on your age (the older you are, the more you’ll be eligible to borrow), interest rates and the appraised value of your home. In 2024, the maximum you could borrow was $1,149,825.
There’s no restriction on how homeowners must spend funds from a reverse mortgage, so you can use the money for a variety of purposes, including making your home more accessible, generating additional retirement income or paying for long-term care. You can estimate the value of a reverse mortgage on your home at www.reversemortgage.org/about/reverse-mortgage-calculator.
Up-front costs for a reverse mortgage are high, including up to $6,000 in fees to the lender, 2% of the mortgage amount for mortgage insurance, and other fees. You can roll these costs into the loan, but that will reduce your proceeds. For that reason, if you’re considering a move within the next five years, it’s usually not a good idea to take out a reverse mortgage.
Another drawback: When interest rates rise, the amount of money available from a reverse mortgage declines. Unless you need the money now, it may make sense to postpone taking out a reverse mortgage until the Federal Reserve cuts short-term interest rates, which is unlikely to happen until late 2024 (unless the economy falls into recession before that). Even if interest rates decline, they aren’t expected to return to the rock-bottom levels seen over the past 15 years, according to a forecast by The Kiplinger Letter. And with inflation still a concern, big rate cuts such as those seen in response to recessions and financial crises over the past two decades are unlikely.
Note: This item first appeared in Kiplinger’s Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
In this article, we will take a look at the 20 best states for construction jobs in the US. If you want to skip our discussion on the construction industry, you can go directly to the 5 Best States for Construction Jobs in the US.
The construction sector serves as a significant indicator of economic activity, providing valuable insights into the overall health of an economy. Despite encountering challenges such as rising material costs and supply chain disruptions, the residential construction sector is experiencing a positive turn in 2023. According to Global Data, the size of the US construction market was $2.1 trillion in 2022. The report predicts a steady average annual growth rate of at least 4% for the next four years. The primary sectors within the US construction market include residential, commercial, industrial, institutional, infrastructure, energy, and utilities construction.
Homebuilder companies’ stocks are rising as investors anticipate Fed rate cuts. Earlier this month, the Federal Reserve indicated plans for three rate cuts in 2024. Furthermore, last week, mortgage rates dropped below 7% for the first time since August, which renewed momentum in the housing market. Popular builder stocks like Lennar Corp. (NYSE:LEN) and DR Horton (NYSE:DHI) have shown over 60% growth in 2023, while PulteGroup (NYSE:PHM) has risen by over 120%. You can check out the 13 Most Profitable Real Estate Stocks here. The positive shift in market sentiment is credited to the increasing demand for new homes, driven by buyer preferences and mortgage rate reductions that make new homes more appealing compared to used homes. This growth in demand is further supported by employment data. Unemployment in the construction sector, which reached its peak at 16.6% in March 2020, decreased to 4.8% in November 2023 after reaching 6.9% in January 2023.
Here’s what Baron Funds said about Lennar Corp. (NYSE:LEN) in its Q2 2023 investor letter:
“Our investments in homebuilder companies – Toll Brothers, Inc., Lennar Corporation (NYSE:LEN), and D.R. Horton, Inc. – performed well in the first six months of 2023. The share price of Toll Brothers increased nearly 60% and the shares prices of Lennar and D.R. Horton each gained more than 35%.
Year-to-date, each company has witnessed a meaningful uptick in demand to buy homes:
Home buyers continue to come off the sidelines and buy homes despite 30-year mortgage rates remaining in the 6.5% to 7.0% range. Several factors are contributing to the recent strength, including pent-up demand to buy homes and fears that mortgage rates could move higher. • The sticker shock of rapidly rising mortgage rates appears to have cooled down. Homebuilders have made homes more affordable to prospective home purchasers by offering mortgage rate buydowns to the mid-5% mortgage rate range while maintaining strong profitability margins. • A dearth of inventory in the existing home market and an overall housing supply shortage is driving home buyers to “stretch their wallet” due to fears that they could miss the opportunity to buy a home.
We remain optimistic about the long-term potential for the Fund’s investments in Toll Brothers, Lennar, and D.R. Horton for several reasons…” (Click here to read the full text)
According to the US Bureau of Labor Statistics, Wyoming, North Dakota, and Montana are identified as the best states for construction jobs on the basis of location quotient. The location quotient is a metric employed by the Bureau of Labor Statistics (BLS) to assess the level of concentration of a specific industry within a particular state in comparison to the entire nation. The industry’s overall outlook is optimistic, and the construction sector is predicted to experience significant growth throughout 2024. With this context in mind, let’s see which state has the most construction work 2023.
Aerial view of a construction site for a single family detached home.
Our Methodology
To identify the 20 best states for construction jobs in the US, we referred to the US Bureau of Labor Statistics for the latest state-specific data on location quotient and average annual salary. Location quotients are ratios that provide insights into an area’s employment distribution by industry. A location quotient higher than 1 signifies that an industry holds a larger share of local area employment compared to the national average. The 20 best states for construction jobs in the US have been ranked in ascending order of their location quotients.
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20. Texas
Location Quotient: 1.14
Average Salary: $49,760
Texas ranks 3rd in the US in terms of population growth rate as of 2023. The average annual salary for construction workers in the state stands at $49,790. Texas emerged as one of the leading states in the construction industry, adding over 21,000 jobs in 2023.
19. Nebraska
Location Quotient: 1.16
Average Salary: $51,250
In 2023, the total construction value in Nebraska’s economy amounted to $3.91 billion, with a corresponding Gross State Product (GSP) of $126 billion. The average annual salary for a construction worker in Nebraska stands at $51,250.
18. Arizona
Location Quotient: 1.16
Average Salary: $52,470
In 2023, the total construction value in Arizona reached $13.94 billion, while GSP stood at $136.2 billion. Despite the challenges in construction growth, Arizona maintained a 5-year average annual employment growth rate of 2%. Real estate and rental and leasing are amongst the top employment segments for the state.
17. Vermont
Location Quotient: 1.17
Average Salary: $52,062
The total construction value in Vermont amounted to $893.91 million in 2023, experiencing an annual growth of 1.3%. The GSP for the same year reached $30.2 billion. However, Vermont faced a challenge in employment growth, with a 5-year average annual rate of -1%.
16. Oklahoma
Location Quotient: 1.19
Average Salary: $49,820
The GSP of Oklahoma for 2023 was $195.2 billion, while the value of total construction was $4.4 billion. This was a decrease of 6.4% on an annual basis, while the five-year annualized decline was 4.5%.
15. Hawaii
Location Quotient: 1.19
Average Salary: $77,850
The contribution of total construction to Hawaii amounted to $2.64 billion. The five-year annualized growth for construction experienced a decline, contracting by 7.5%. Despite these challenges, Hawaii’s GSP remained at $76.5 billion.
14. Washington
Location Quotient: 1.22
Average Salary: $73,140
With a GSP of $577.2 billion, the value of the construction sector in the state was $21.28 billion in 2023. The five-year annual growth rate for the construction sector in the state was 3.7%. Meanwhile, the average annual employment growth rate for the state was 1%.
13. Colorado
Location Quotient: 1.24
Average Salary: $57,430
The contribution of the construction sector to Colorado’s economy was $17.41 billion, while the total GSP was $371.3 billion in 2023. This was an increase of 0.9% year on year. Over the past five years, the average annual employment growth rate in the state was 1.4%.
12. Maine
Location Quotient: 1.26
Average Salary: $52,350
Maine is at the twelfth position on our list of the 20 best states for construction jobs in the US. The average annual salary for a construction worker in the state is $52,350. Maine’s GSP in 2023 was recorded at $65.5 billion.
11. South Dakota
Location Quotient: 1.33
Average Salary: $47,170
In 2023, South Dakota’s GSP amounted to $50.5 billion. The construction sector contributed $1.43 billion to the GSP, experiencing a negative growth rate of -3.1% for the year. Over the past five years, South Dakota had an average annual employment growth of 1.0%.
10. Nevada
Location Quotient: 1.34
Average Salary: $61,570
Nevada is among the top 10 best states for construction jobs in the US. The value of total construction in Nevada was $9.08 billion during 2023, with an annualized 5-year growth rate of 0.4%. The GSP for the same period was $170.1 billion.
9. Louisiana
Location Quotient: 1.43
Average Salary: $50,350
Louisiana’s GSP was recorded at $219.1 billion for 2023. The construction sector contributed $7.08 billion to the GSP. The state experienced a five-year average annual employment growth of -0.4%.
8. West Virginia
Location Quotient: 1.47
Average Salary: $52,740
The GSP of West Virginia for 2023 was recorded at $71.7 billion, with an annualized 5-year growth rate of 0.1%. The contribution of the construction sector to the GSP was $2.28 billion. The state experienced a five-year average annual employment growth of -0.4%. The major employment sectors in West Virginia include mining, healthcare and social assistance, and manufacturing.
7. Idaho
Location Quotient: 1.48
Average Salary: $49,620
Idaho is amongst the fastest-growing US states in terms of population. Idaho’s gross state product for 2023 was $85.7 billion, with an annualized 5-year growth rate of 15.3%. The contribution of the construction sector to the GSP was $3.71 billion in 2023. The five-year growth rate for the construction sector in the state is 4.1%.
6. Utah
Location Quotient: 1.52
Average Salary: $52,380
Utah is the fastest-growing US state in terms of GSP and the second in terms of population growth. Its GSP for 2023 was $185.2 billion, with an annualized 5-year growth rate of 3.7%. The contribution of the construction sector to the GSP was $11.83 billion during 2023. Over the five-year period, the construction sector achieved a growth rate of 5.9%.
Lennar Corp. (NYSE:LEN), DR Horton (NYSE:DHI), and PulteGroup (NYSE:PHM) are some of the popular builder stocks contributing to the growth of the construction industry.
Click to continue reading and see the 5 Best States for Construction Jobs in the US.
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Disclosure: None. 20 Best States for Construction Jobs in the USis originally published on Insider Monkey.
If you’re exploring career options, pharmacy might have popped up on your radar — and for good reason. Not only can pharmacists command a good salary, they also have job security, as the pharmaceutical industry is one that won’t vanish any time soon.
That said, how much does a pharmacist make? Is it worth all the trouble of going through pharmacy school to become one? Let’s find out.
What Are Pharmacists?
You’ve likely picked up a prescription or two at a pharmacy, but maybe you didn’t give any thought to the person behind the counter. This individual is your local pharmacist, and it’s their job to prepare and dispense prescription medications.
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Pharmacist Job Responsibility Examples
In addition to doling out prescription drugs, pharmacists also consult with patients, provide instructions for how to take medications, and help patients find low-cost medications. Some also give health screenings and immunizations.
Keep in mind, a pharmacist often needs to be outgoing, since their work involves speaking with patients throughout the day. If that’s not your personality, you may want to look into jobs for introverts. 💡 Quick Tip: We love a good spreadsheet, but not everyone feels the same. An online budget planner can give you the same insight into your budgeting and spending at a glance, without the extra effort.
How Much Is a Starting Pharmacist Salary?
As with most professions, pharmacists tend to earn more money as they gain more experience. But what is a good entry-level salary for pharmacists?
Pharmacists with less than a year of experience generally earn, on average, about $54 per hour. That’s $112,320 per year.
Of course, how much you actually can earn depends on where you live, what your duties are, and whether you work for an independent pharmacy or a chain. It can also help to research the highest-paying jobs by state.
Recommended: Is a $100,000 Salary Good?
What Is the Average Salary for a Pharmacist?
Now that you see what starting salaries are for pharmacists, let’s address the next question: How much money does a more experienced pharmacist make?
Generally speaking, pharmacists are usually paid by the hour. A pharmacist with 10 years of experience earns an average of $67.05 per hour. That adds up to $139,464 per year.
What Is the Average Pharmacist Salary by State for 2023?
The amount you make will depend on where you live, among other factors. Here’s a look at the average pharmacist salaries by state, from highest to lowest.
State
Salary
California
$161,597
Oregon
$155,710
Washington
$149,466
New Hampshire
$141,041
Nevada
$140,869
Maine
$139,517
Vermont
$137,658
Delaware
$136,276
Maryland
$135,894
Connecticut
$134,175
Alaska
$134,044
Massachusetts
$131,978
Rhode Island
$131,960
New Jersey
$131,698
New York
$131,594
Pennsylvania
$129,724
New Mexico
$129,145
Wisconsin
$128,918
Minnesota
$128,502
Virginia
$128,380
Hawaii
$128,245
Arizona
$126,174
Idaho
$125,760
North Carolina
$125,068
Michigan
$124,768
Colorado
$120,986
Illinois
$120,887
Kansas
$118,122
Ohio
$117,573
Kentucky
$117,448
Indiana
$117,338
Missouri
$116,513
Nebraska
$116,366
Utah
$116,009
South Carolina
$115,570
West Virginia
$115,339
Texas
$115,089
North Dakota
$114,359
Georgia
$114,118
Tennessee
$112,879
Wyoming
$112,326
Montana
$111,924
Iowa
$110,405
Florida
$109,106
Alabama
$106,271
Mississippi
$105,677
Louisiana
$102,542
South Dakota
$100,246
Oklahoma
$98,951
Arkansas
$89,660
Source: Zippia
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Pharmacist Job Considerations for Pay & Benefits
Where you live is one factor that can determine how much you earn as a pharmacist. Your on-the-job responsibilities may also play a role. For example, there are different job titles, and each has its own set of responsibilities, requirements, and salary ranges. Examples include:
• Staff pharmacist
• Pharmacy specialist
• Clinical pharmacist
• Pharmacy manager
• Director of pharmacy
Some pharmacists may have roles and responsibilities beyond filling prescriptions, such as offering immunizations and health screenings. Some may be in charge of hiring and managing other employees. Some may work in traditional pharmacies, while others may work for companies focusing on chemotherapy, nuclear pharmacy, or long-term care.
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Pros and Cons of Pharmacist Salary
While being a pharmacist can be a rewarding job, there are potential drawbacks to keep in mind. Let’s look at some pros and cons.
Pros of Being a Pharmacist
Naturally, the high salary pharmacists tend to command may be one reason to consider this career path. Because many pharmacists get paid by the hour, they’ll be compensated fairly for their time even if they work more than 40 hours a week.
Another perk is that you may have a flexible schedule that allows you to work part-time or during certain hours. There could even be opportunities to work remotely, which may be useful if you’re working in a rural area.
You might also be able to open your own pharmacy instead of working for someone else. This brings freedom and flexibility to you as a business owner.
Finally, you’ll be a valuable member of your community, since it’s your job to help people on their path to wellness.
Cons of Becoming a Pharmacist
If becoming a pharmacist was easy, everyone would do it! For starters, you’ll need to have about six years of education after high school. And the cost of pharmacy school can range anywhere from $5,000 to $30,000 a year for an in-state public college, or $20,000 to $95,000 a year for a private school.
Depending on your financial situation, this could require you to tap into savings or take out student loans. (Creating a budget while you’re in school or just starting out can help you keep track of where your money is going. A money tracker app can help make the job easier.)
Another possible drawback? Some pharmacies may not guarantee a certain number of hours a week, and in that case, being paid hourly may not come with the big paycheck you’d expect.
Also keep in mind that some pharmacists work long hours, which can have a negative impact on your health and mental wellbeing. 💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.
The Takeaway
If you’re looking for a rewarding and potentially lucrative job, becoming a pharmacist might fit the bill. You’ll help your local community get healthier, and depending on where you live and your level of experience, you could earn competitive pay, too.
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FAQ
What is the highest pharmacist salary?
The state where pharmacists tend to earn the most is California. The average annual income of a pharmacist there is $161,597.
Is it hard to be hired as a pharmacist?
Becoming a pharmacist requires six years of education after high school. The workload is challenging, and pharmacies looking to hire generally have high expectations of applicants.
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