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Finding an affordable apartment you love in the neighborhood of your choice can feel like you’ve won the lottery. But before you can call the movers, you’ll need to take the first step and go through the screening process. In most cases, this means filling out a rental application.

Rental applications are a way for landlords to determine whether or not a potential tenant will be responsible when it comes to paying the rent. In order to do so, the property owner or management company may also ask for a credit reference. This is a person, company, or document that provides details about your credit history.

There are different types of credit references, and your landlord may require more than one to ensure you’ll be a no-risk, trustworthy tenant.

What Are Credit References on a Rental Application?

Along with asking for your name, address, employment information, and past residential history on your application, a landlord will want to make sure you regularly meet your financial obligations. After all, a landlord or property manager doesn’t want to take a risk on someone who doesn’t pay their monthly rent in full and on time. This is where a credit reference comes into play.

Credit references are documents, businesses, or individuals that can verify your credit history. Similar to character references a prospective employer might request before they hire you, a credit reference refers to a person or a company with whom the applicant has had a positive financial relationship.

The credit reference provides the landlord with details about an applicant’s financial situation, such as the length of the financial dealings with the entity, the applicant’s payment record, and whether they’re in any debt.

How Does a Credit Reference on a Rental Application Work?

When you decide upon an apartment rental, the first thing you need to do is notify the landlord or property manager as soon as possible, especially if you live in a city where rental competition is stiff. If the place is still available, you’ll be asked to submit a paper or electronic rental application.

Depending on the landlord or property manager’s application process, you may be asked to provide credit references on the form. This could entail listing any current creditors’ names and contact information, detailing the amounts owed on any loans, or answering whether or not you’ve ever declared bankruptcy.

After you’ve completed the application, the landlord will typically contact the credit sources you provided. It’s best to be honest when filling in any past and present financial information on the application. If not, chances are the landlord will find out on their own during the credit reference check. Not being truthful at the start can be a glaring red flag for the landlord, increasing the likelihood they’ll reject the application.

Types of Credit References

There are several kinds of credit references a landlord may use to confirm you’re in good financial shape and will be able to afford the monthly rent. Financial agreement documents such as asset documentation, credit reports, and character reference letters are some things landlords often request.

Read on to learn about three types of credit references a landlord may require:

Credit Report

Credit reports — a credit check used by employers, lenders, and landlords to gauge how responsible a person is when it comes to managing credit and handling their financial obligations — are the most commonly used credit reference. These statements detail someone’s credit history, including their payment record, current account balances, and any outstanding debts, including those referred to a collection agency.

There are three major credit bureaus that issue credit reports. A landlord may use one or two of these credit reporting agencies or order a more comprehensive tri-merge credit report, which culls data from all three companies.

As part of their credit check, landlords may request your FICO score or, less commonly, your VantageScore. In either case, this is a three-digit number that reflects how dependable you are when it comes to paying back borrowed debt. Both companies use a 300-850 credit score range.

Landlords typically look for a score of 600 or above. Depending on whether they pull your credit score through FICO or VantageScore, where the number lands in the 600 plus range may be considered a good or fair credit score. For instance, FICO’s fair credit scores are between 580 and 669, while their good credit range is between 670 and 739. VantageScore’s fair credit scores range from 601 to 660, and good credit falls between 661 to 780.

According to the Fair Credit Reporting Act, a landlord cannot run a credit check without your prior authorization. And, if you do give permission to run a credit check, the landlord may charge you an additional fee, so be sure to check your rental application carefully.


💡 Quick Tip: Check your credit report at least once a year to ensure there are no errors that can damage your credit score.

Asset Documentation

Asset documentation gives proof of a person’s financial assets and is considered a highly effective type of credit reference. Landlords may want to know if an applicant has back-up funds for rent in case there are unseen circumstances, such as job loss.

A landlord may ask you to provide certain documents, such as several months’ worth of statements from your current checking, savings, retirement, and/or investment accounts. In order to obtain these records, you’ll need to ask the financial institutions who manage your assets to provide them to the landlord or property management company, unless you can supply them on your own.

Recommended: Do Banks Run Credit Checks for a Checking Account?

Character and Credit Reference Letters

Professional and personal references can be a great option for vetting someone’s financial reliability. While a landlord might be more interested in your credit score and asset documentation, a character reference letter may help give you an edge.

Character reference letters can come from a previous landlord, employer, faith leader, professor, or an entity you’ve previously done business with, like a utility company. Ideally, you’ll want to get a letter from any source that can speak to your reliability and conscientiousness and explain why you’d be an ideal tenant.

How Do Credit References Impact Rental Applications?

Credit references can have a significant impact on whether or not you get the apartment. If the landlord reviews your credit history and has any concerns about your income to debt ratio or low credit score, they can turn you down.

On the flip side, seeing a stellar record of paying your bills on time and verifying you’ve been a trustworthy tenant in the past can help convince a landlord you’re the right choice.

Examples of Credit References

•   Letters of reference from any former landlords stating you’ve paid your rent routinely and have had an issue-free relationship

•   A copy of your credit report

•   Checking or savings account bank statements

•   Documentation from a utility company listing a positive payment history

•   Character reference letters from personal or professional acquaintances

When You Need Credit References on an Apartment Application

Generally, landlords will want credit references when considering whether to approve an application of a first-time renter, someone who makes a lower salary, or a person who has no credit history. In such scenarios, the renter will want to consider having a guarantor or cosigner on the application.

Guarantors or cosigners are people who have good credit and can sign the lease with you. A cosigner can be a parent, family member, or friend who agrees to take legal responsibility for paying your rent if for some reason you can’t.

How Long Does It Take to Process a Rental Application?

In most cases, rental applications are approved within 24 to 72 hours. Property management companies that oversee larger complexes and have ample staff can process applications faster than a solo landlord.

It may take longer to approve an application when, for example, you’re applying with a cosigner or if you’re renting with roommates. That’s because there are more people involved, more credit references to gather, and more credit reports to pull.

Tips for Credit References

Prepare in Advance

You may not be initially required to provide credit references on your application, but that doesn’t mean a landlord won’t ask for it later. Get your ducks in a row by gathering any necessary paperwork and reaching out to anyone you may want as a character reference.

If you think you’re going to need a cosigner, start a conversation with that person so they’re not totally blindsided or asked to commit at the last minute.

Check Your Credit Report

Running and reviewing your credit report can tip you off to any errors, indicate any fraudulent activity, and provide your current credit score. You can also resolve any credit issues that might give a landlord a reason to reject your application.

According to the Consumer Financial Protection Bureau, you are entitled to request one free copy of your credit report every year from each of the three credit bureaus. You can order your free report by visiting AnnualCreditReport.com . Note that all three credit report providers are offering free weekly online credit reports until the end of 2023.

You can also sign up for credit score monitoring through SoFi and get insights on your financial health and credit.

Choose Your Character References Carefully

Make sure the people you’re asking to vouch for your dependability are those you trust, know well, and will be able to communicate clearly what makes you a good renter.

Don’t Be Afraid to Give the Landlord a Head’s Up

Sometimes a lower credit score or a record of late or missed payments may not be your fault. Certain life events can cause financial upheaval, such as being a victim of identity theft, getting laid off, or abruptly losing a roommate, leaving you responsible for the entire rent.

Writing a letter to the landlord offering an explanation for the spotty record — and attesting you’re working hard to improve your credit — may save you from being rejected outright.


💡 Quick Tip: An easy way to raise your credit score? Pay your bills on time. Setting up autopay can help you keep your account in good standing.

The Takeaway

When applying for a rental apartment or home, providing solid credit references allows a landlord or a property manager to determine your ability to pay the rent in full every month. Credit references can impact whether or not your application is approved. Knowing what types of credit references you may have to produce — and taking care to monitor your credit report and clean up any issues — can help boost your odds of landing that coveted home.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

What should I put as a credit reference?

Your landlord will typically be the one to dictate what credit references they want. But if they only run a credit report, you may want to send along anything else that could bolster your financial worth, such as savings and investment account statements.

What is an example of a credit reference for an apartment application?

Examples of credit references may include your bank, previous landlords, companies whose bills you pay regularly, supervisors, or your faith leader.

How do you get a credit reference?

You may be able to obtain a credit reference by requesting a copy of your credit report, authorizing a credit check, or asking for a character reference letter.

How many credit references do you need?

It depends on the landlord. While some won’t ask for any credit references, others will require one or more. To be safe, it’s probably a good idea to plan for at least two

Can you buy a credit reference?

No. Credit references need to be earned by capably managing your money, paying your bills, and having minimal debt. While you can pay a credit repair company to go over your credit report and dispute any errors on your behalf, you still have to do the heavy lifting of diligently meeting your overall financial responsibilities.

Photo credit: iStock/FluxFactory

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL0523008

If you dream about spending your days creating beautiful looks with your favorite beauty products, then becoming a professional makeup artist may be a good career to pursue.

But just how much money does a makeup artist make? Unlike some other creative fields, this profession can be lucrative. According to the U.S. Bureau of Labor Statistics (BLS), the median annual salary for a makeup artist is $134,750.

Keep reading for more insight into makeup artist earnings, how salaries vary by state, and what this job entails.

What Is a Makeup Artist?

A makeup artist is a skilled professional responsible for applying cosmetics and beautifying an individual’s appearance for various purposes. They use their expertise to enhance facial features, create desired looks, and achieve specific artistic visions. Makeup artists work across various industries, including fashion, film, television, theater, special effects, weddings, and events. In addition to traditional makeup applications, some makeup artists specialize in special effects makeup, enabling them to create realistic wounds or fantastical characters for films or theater productions.

Personality plays a big role in whether or not someone will enjoy being a makeup artist. A job as a makeup artist can be suitable for introverts, as it allows them to work in a more controlled and focused environment with clients one on one. However, working in certain settings, such as movie sets or high-profile events, may be a better fit for extroverts.

Recommended: 15 Entry-Level Jobs for Antisocial People

How Much Is a Makeup Artist’s Starting Salary?

How much does a professional makeup artist make when they first begin their career? Like anyone embarking on a new career path, makeup artists tend to earn less when they’re just starting out. According to the latest BLS data, the lowest 10 percent of earners in the makeup artist field earn a median salary of $38,070. However, as artists gain more experience and exposure, they have the potential to earn much more than that entry-level salary.


💡 Quick Tip: When you have questions about what you can and can’t afford, a spending tracker app can show you the answer. With no guilt trip or hourly fee.

What Is the Average Salary for a Makeup Artist?

Makeup artistry is a type of trade job that has the potential to earn a lot of money. Let’s take a closer look at the average salary for a makeup artist.

•   How much does a makeup artist make a year? The median annual salary for a makeup artist is $134,750.

•   How much does a makeup artist make per hour? When it comes to hourly pay, makeup artists earn a median of $64.78

Where someone lives can play a major role in how much they earn as a makeup artist. Because the cost of living varies so much by state, salaries can vary a lot, too. While the BLS has limited data collected on how much makeup artists earn in different states, the information it does have makes it clear how much salaries can vary.

For example, in Nevada, the median annual salary for a makeup artist is $30,760, whereas in New York it is $125,000. Alongside cost of living factors, there may be more job opportunities for makeup artists in some states. New York City is a major fashion and entertainment hub that likely has a high demand for makeup artists, which can lead to more competitive pay rates.

Recommended: The Highest-Paying Jobs in Every State

Makeup Artist Benefits & Job Considerations

While makeup artists have the potential to earn a six-figure salary, the biggest downside of this job is that it is not common to earn benefits like health insurance or to have access to a 401(k). This is because most makeup artists are self-employed and are responsible for securing and paying for any traditional employee benefits they desire.

Pros and Cons of Makeup Artist Salary

Like all jobs, working as a makeup artist comes with a unique set of pros and cons to consider before pursuing this career path.

Pros

•   Creative opportunities: Makeup artists have the freedom to express their creativity by creating unique looks for their clients, whether it’s for a photo shoot, movie, or special event.

•   Interesting workdays: The profession offers a diverse range of opportunities, from working on movie sets to collaborating with cosmetic retailers.

•   No formal education required: Unlike many other careers, becoming a makeup artist doesn’t demand a college degree.

Cons

•   Restricted earning potential: The industry’s salary standards may limit the earning potential of makeup artists, with only a few able to negotiate higher pay. What’s more, self-employed artists may not always receive consistent income or benefits.

•   Geographic limitations: Makeup artists may need to relocate to major cities like Los Angeles, New York, Chicago, or Las Vegas to find steady work, and they may also have to travel with clients for various projects.

•   Irregular work schedule: Makeup artists often have to adapt to erratic work hours, including weekends, holidays, and long periods of uncertainty between gigs. Maintaining a stable work-life balance could be a challenge.


💡 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

Makeup artistry can be a rewarding career — and potentially lucrative. How much money does a makeup artist make a year? The median annual salary for a makeup artist is $134,750. While the work can be creative and glamorous, it also lacks a traditional work schedule. Plus, most makeup artists have to foot the bill for their own employee benefits. Those considering a career in this industry need to carefully consider if the advantages of this role (like a high median salary) outweigh the disadvantages.

FAQ

Can you make good money doing makeup?

If someone is asking, how much does a makeup artist make in a year, they’ll probably like the answer. The median annual salary for a makeup artist is $134,750, so yes, it is possible to make good money doing makeup. However, some states, like New York, have much more lucrative job opportunities than other states.

Can you make six figures as a makeup artist?

Yes, it is possible to make six figures as a makeup artist. The median annual salary for makeup artists nationwide is $134,750, according to the latest BLS data. However, where they live plays a major role in how likely they are to earn a $100,000 salary as a makeup artist.

How much profit does a makeup artist get?

The profit a makeup artist receives varies greatly depending on their employment status and the specific makeup services they offer. Self-employed makeup artists have the potential to earn the full profit after deducting operating costs, while those working for cosmetic retailers or salons may receive a fixed salary or commission-based earnings. Factors such as location, experience, clientele, and demand for their services can also impact overall profit.

Photo credit: iStock/anatoliy_gleb

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SORL0723007

Bank tellers are the face of local bank branches. When you visit a bank in person, tellers welcome you in with a smile and help you with your transaction — whether you’re depositing a check or withdrawing cash from your savings account.

What are the job responsibilities like, and how much does a bank teller make an hour? Our in-depth guide to bank teller salaries and skills will help you determine if it’s the right career for you.

What Does a Bank Teller Do?

A bank teller’s job is to help customers complete financial transactions with their bank accounts. Tellers work in person at bank branches and can help with things like opening and closing accounts, and depositing and withdrawing funds.


💡 Quick Tip: When you have questions about what you can and can’t afford, a spending tracker app can show you the answer. With no guilt trip or hourly fee.

Bank Teller Job Responsibility Examples

What might a bank teller do in their day-to-day? Here are a few examples:

•   Greet customers as they enter the bank or credit union

•   Complete transactions through the bank drive-through

•   Help customers open a new checking or savings account

•   Answer calls and emails to offer customer service

•   Prepare money orders, savings bonds, and traveler’s checks for customers

•   Record transactions throughout their shift

•   Count the cash in their drawers at the beginning and end of a shift

•   Explain the various financial products offered by the bank

Bank Teller Skills

Here are some of the skills you’ll need to be a successful bank teller:

•   Positive attitude

•   Patience

•   Customer service

•   Clear communication

•   Math and money management

•   Sales

•   Technology

•   Willingness to learn

How Much Do Starting Bank Tellers Make?

The Bureau of Labor Statistics (BLS) reports that the average hourly wage for a bank teller is $17.69, but those just starting out should expect to make less. According to Indeed, bank tellers with less than a year of experience make $15.89 an hour on average, but that varies by location.

What Is the Average Salary for a Bank Teller?

The average salary for a bank teller is $36,800, but this varies by level of experience and by location. For instance, the BLS breaks down mean bank teller salaries by state:

•   How much does a bank teller make in California? $42,120 a year

•   How much does a bank teller make in Texas? $33,820 a year

•   How much does a bank teller make in Florida? $37,920 a year

Bank tellers earn the highest average annual salary in Washington state ($43,500) and the lowest average annual salary in West Virginia ($29,600). Check out the table below for insight into how much bank tellers make a year, or switch gears and research the highest paying jobs by state.

💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.

Pros and Cons of a Bank Teller Salary

A job as a bank teller has some pros, but there are a number of cons, like a low salary, to consider:

Pros

•   Career growth: The average hourly rate of a bank teller may not be as competitive as other entry-level salaries, but there’s plenty of room for advancement as a bank teller. Some tellers move up to head teller positions. Others move on to supervisory positions, become loan officers, or transition to sales.

•   Benefits: Although employees may not earn super competitive pay, bank tellers who work full-time can enjoy nice benefits from the bank, including health care, retirement plans, and paid time off.

•   Regular schedule: Many entry-level jobs, as in retail and restaurants, have unpredictable hours. Banks operate under normal business hours and are closed on Sundays (and bank holidays!). That means you’ll enjoy a more consistent schedule as a bank teller.

Recommended: Should We Raise the Minimum Wage?

Cons

•   Salary: While bank tellers can make good money — the top 10% make an average of $46,350 — the overall average falls below what the typical person with a high school diploma makes in a year in the U.S. Here are some of the best jobs without a college degree.

•   Job outlook: The BLS is predicting a 12% decline in job opportunities from 2021 to 2023. As more financial institutions switch to predominantly online banking experiences and shut down branches, job insecurity for bank tellers could be further undermined.

•   Draining job: Bank tellers must deliver an excellent customer experience every day. When customers are dealing with finances, it’s easy for them to become frustrated or upset — which can be draining for bank tellers who are trying to help. To be clear, this is not a job for antisocial people!

Recommended: What Trade Job Pays the Most Money?

The Takeaway

Bank tellers can make decent money, though there may be other jobs that require the same level of experience and education but pay more. However, hard-working bank tellers can often move up within the company and command better salaries.

Take control of your finances with SoFi. With our financial insights and credit score monitoring tools, you can view all of your accounts in one convenient dashboard. From there, you can see your various balances, spending breakdowns, and credit score. Plus you can easily set up budgets and discover valuable financial insights — all at no cost.

FAQ

Which bank pays the most for tellers?

According to data from Indeed, the financial institutions that pay the most for tellers include Bank of America, Logix Federal Credit Union, Avadian Credit Union, Investors Bank, and Chase.

What is the highest teller salary?

The top 10% highest paid bank tellers make an average annual salary of $46,350 — that’s $22.29 an hour. Bank tellers in Washington state, California, and Connecticut are the highest paid, on average.

Is it hard to be hired as a bank teller?

Because of the rise in online banking, it’s becoming more challenging to be hired as a bank teller. In fact, the Bureau of Labor Statistics predicts that bank teller employment will decline 12% between 2021 and 2031.

That said, you don’t need a college degree to become a teller, and training is all on the job. This makes breaking into the career field easier for those without a secondary or vocational education.

Photo credit: iStock/Fly View Productions

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SORL0523005

The average salary for a construction worker in 2022 was $46,350, or $22.29 per hour. Construction workers are a crucial part of the labor force across the country, and the industry is expected to grow through the end of the decade. Without a formal education requirement, construction work can be a viable option for anyone uninterested in getting a college degree right after high school.

That said, construction labor can be grueling. The job is physically demanding and at times dangerous. You’ll need to consider your physical limitations before pursuing a career in construction work.

Knowing what your income will look like may be the most important consideration of all. We’ll break down the average construction worker starting salary, as well as their typical responsibilities and required skills, below.

What Do Construction Workers Do?

Construction crews work on building sites for new homes, multi-family units, commercial buildings, roads, and bridges. Following detailed plans, construction workers are responsible for taking apart old structures and erecting new ones.

Depending on the job site, construction workers may operate heavy machinery, use hand tools, and perform plumbing and electrical tasks.

Construction work requires significant strength, endurance, and tolerance for extreme temperatures. The industry also has one of the highest rates of injuries on the job, so construction laborers must be familiar with safety protocols.


💡 Quick Tip: When you have questions about what you can and can’t afford, a spending tracker app can show you the answer. With no guilt trip or hourly fee.

Construction Worker Job Responsibility Examples

What kinds of things might you be responsible for as a construction worker on a job site? Here are some examples:

•   Removing debris

•   Loading and unloading materials

•   Assembling bracing, scaffolding, and other temporary structures to help with the construction

•   Operating heavy machinery and using hand tools when building and taking apart structures

•   Digging trenches, compacting earth, and backfilling holes

•   Directing traffic

•   Driving work trucks (may require a CDL, or commercial drivers license)

•   Measuring and cutting materials

•   Conducting minor plumbing, electrical, and carpentry work

Construction Worker Skills

Though you don’t need a secondary education to be a construction worker, you’ll need to learn specific skills. You might learn some of these on the job:

•   Ability to use tools and operate machinery

•   Plumbing, electrical, carpentry, masonry, concrete, roofing, drywall, and/or demolition know-how

•   Knowledge of various safety protocols

•   Basic math and measurement

•   Hand-eye coordination

•   Physical strength and energy

In addition, construction workers must be able to problem-solve on the fly and must embrace teamwork. This is not a job for introverts!

How Much Do Starting Construction Workers Make?

Construction worker entry-level salaries vary by state, but you can expect pay to be on the lower end when just starting out. The bottom 10% of earners in the industry bring home about $29,700 per year.

If you’re entering the construction industry with a degree, you will likely make more starting out. With an education, you might go straight into construction management. The bottom 10% of construction managers earn $62,210 a year. The average annual salary is $112,790.

Recommended: Is $100,000 a Good Salary?

What Is the Average Salary for a Construction Worker?

The average salary for a construction worker in 2022 was $46,350, but rates vary significantly across the country. The average hourly rate for a construction worker is $22.29 per hour. Total income is about the same whether you get a salary vs. hourly pay.

As you’d expect, areas with a higher cost of living (think California, New York, and Hawaii) generally have more competitive pay than areas with a lower cost of living (states like Alabama, Mississippi, and Arkansas).

How much do construction workers make in California? $56,210, on average. In New York, the mean salary is even higher, at $59,280 a year. But it’s Hawaii where construction workers make the most money on average: $66,650.

Check out the following table for additional state insights:

💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.

Pros and Cons of Construction Worker Salary

Being a construction worker has some advantages, but there are also drawbacks to consider:

Pros

•   Higher than average salary: The average salary for someone without a college degree is just over $37,000. Construction workers earn more than $9,000 a year over that, without any formal education — and without any student loan debt.

•   Job growth: The job market is projected to grow by 4% from 2021 to 2031, meaning there should be ample opportunities available.

•   Flexibility: Construction jobs are available across the country. If you want to relocate somewhere else, you shouldn’t have trouble finding a job.

Recommended: Should We Raise the Minimum Wage?

Cons

•   Difficult work: Construction labor can be physically demanding. It may lead to injury and illness, and you can leave job sites tired and sore each day.

•   Less money: Construction workers make significantly less money than construction managers. If you’re able to get a bachelor’s degree in construction management, you may earn more money over your lifetime.

•   Long-term career options: As you age, you may become less equipped to keep up with the physical demands of the job. This could force an early retirement, right when you should be in your earning prime. You may instead need to look for a work-from-home job for retirees to ensure you have enough income until you’re eligible for Social Security benefits and other retirement income.

The Takeaway

Construction workers can make decent money over the course of their careers, and you won’t have to take out a student loan to get a degree to land a job. However, the work can be exhausting and lead to injury. Weigh all the pros and cons carefully before starting a career as a construction worker.

FAQ

How much do most construction workers make?

How much money a construction worker makes depends on where they live and their level of experience. However, the average construction laborer brings in $46,350 a year.

Who is the highest paid construction worker?

Hawaii has the highest paid construction workers, with an average salary of $66,650. However, the top 10% of construction workers in New Jersey outpace the earnings of the top 10% in Hawaii, bringing home $101,360 a year. Across the country, the top 10% highest paid construction workers average an annual salary of $72,430.

What job pays the best in construction?

Pipeline transportation of natural gas is the highest paying job in construction, with laborers earning $81,670 a year on average. Other high-paying construction jobs include electric power generation, transmission, and distribution; construction support services; construction work for medical and surgical hospitals; and rail transport construction.

Photo credit: iStock/damircudic

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Initial public offering (IPO) book building can help with efficient price discovery for companies looking to IPO. After the IPO, when shares are available for trading in the secondary market, book building may also be used to price secondary equity offerings.

With book building, the investment bank that underwrites an IPO reaches out to institutional investors to gauge their interest in buying shares of a company looking to go public. The underwriter asks those interested to submit bids detailing the number of shares they seek to own and at what price they would be willing to pay.

The process of book building has become more common than the fixed-pricing method, which may not yield the most accurate results.

Recommended: Why Do Companies Go Public?

What Is Book Building?

Book building is the preferred method by which a company prices IPO shares.

Among the first steps of the IPO process is for the private company to hire an investment bank to lead the underwriting effort. IPO book building happens when the IPO underwriter gathers interest from institutional investors, such as fund managers and other large investors, to determine the value of the private company’s shares.

As part of the IPO and book-building process, the investment bank must promote the company and the offering to stir up interest before they can determine share price.

This is often called an IPO roadshow. If the underwriter finds that there is sufficient interest based on responses from the investor community, then the bank will determine an offering price to the issuer.

Book building is recommended by all the major stock exchanges, and is common practice in most developed countries. It has become more popular than the fixed-pricing method, which involves setting an IPO price before measuring investor interest. Book building, on the other hand, generates and records investor interest to land on an IPO price.

Thus book building helps find a fair share price for a private company based on market interest. When a bank gauges market interest, a floor price is sometimes used, and bids arrive at or above that floor price. The stock price is determined after the bid closing date. With the book building method, demand can be seen in real-time as the book is being built.


💡 Quick Tip: IPO stocks can get a lot of media hype. But savvy investors know that where there’s buzz there can also be higher-than-warranted valuations. IPO shares might spike or plunge (or both), so investing in IPOs may not be suitable for investors with short time horizons.

Book-Building Process

Firms going public want to sell their stock at the highest possible price without deterring the investment community. There are five key steps the issuing company must perform in the process of IPO book building in order to discover a market-based share price.

1.    Find a Banker: The issuing company hires an investment bank to underwrite the transaction. The underwriter advises the company, guiding it through the lengthy book-building process. The investment bank also commits to buying all the shares from the issuer, carrying all the risk. The bank will then resell the shares to investors.

2.    Collect Bids: The investment bank invites investors to submit bids on the number of shares they are interested in and at what price. This solicitation and the preliminary bids give the bankers and the company’s management an indication of the market’s interest for the shares. Roadshows are often used to grow investor appetite.

3.    Determine a Price: The book is built by aggregating demand as the bids arrive. The bank uses a weighted average to determine a final cutoff price based on indications of interest. This step helps with pricing an IPO.

4.    Disclosure: The underwriter must disclose details of the bids to the public.

5.    Allotment: Accepted bidders are allotted shares.

Even if the IPO book-building process goes smoothly and a price is set, it does not ensure that actual transactions will take place at that price once the IPO is open to buyers. Book building simply helps to gauge demand and determines a fair market-based price. But substantial risks remain for interested investors, who could see steep losses if the share price drops after the IPO.


💡 Quick Tip: Look for an online brokerage with low trading commissions as well as no account minimum. Higher fees can cut into investment returns over time.

What Is Partial Book Building?

Partial book building is another form of the IPO book-building process that happens only at the institutional level, rather than the retail level.

With partial book building, a select group of investors is approached regarding their interest in the IPO. Using their bids, a weighted average price is calculated and a cutoff price is determined. That cutoff price is then used as the public offering price to retail investors as a fixed price. The cost of the partial book-building IPO process is often lower due to its relative efficiency.

What Is Accelerated Book Building?

Accelerated book building is used for large equity offerings to raise capital in a short period of time. The investment bank is tasked with book building, determining a cutoff price, and allocating shares within 48 hours or less. No roadshow is involved.

The accelerated book-building process is used when a company needs immediate financing and raising capital from debt is off the table. It is typically done when a firm seeks to acquire another company.

Accelerated book building is often conducted overnight, with the issuing company asking investment banks to serve as underwriters before the next day’s placement.

What Effect Does Book Building Have On IPO Prices?

A good IPO book-building process helps ensure proper market-based price discovery. Still, there is the risk that an IPO can be underpriced or overpriced when shares finally go public. This can lead to volatility, which IPO investors also need to be aware of. This is one reason why IPOs are considered high-risk endeavors.

Underpricing, the main risk to the issuer, happens when the offering price is materially below the share price on the first day of trading. With an underpriced IPO, a company is said to have left money on the table, while an overpriced IPO can have negative implications on the future price of a stock due to poor investor sentiment. Investors can buy IPO stock on Day One of trading in the secondary market, while qualified investors can purchase IPO shares before they begin trading in the open market.

While there is no surefire way to guarantee a good IPO price, the book-building IPO method offers quality pre-market price discovery customized to the issuer. It also reduces the risk for the underwriter. It can have high costs, however, and there is the risk that the IPO will end up being underpriced. The overall goal is to see a good and steady stock performance during and after the IPO.

The Takeaway

The book-building IPO process involves critical steps to ensure a stock goes public promptly with as few hiccups as possible.

There are different types of IPO book building, and the way an investment bank performs the process can impact IPO prices. The goal is for efficient price discovery on shares of the company looking to go public. Book building can also be used for secondary equity offerings.

Whether you’re curious about exploring IPOs, or interested in traditional stocks and exchange-traded funds (ETFs), you can get started by opening an account on the SoFi Invest® brokerage platform. On SoFi Invest, eligible SoFi members have the opportunity to trade IPO shares, and there are no account minimums for those with an Active Investing account. As with any investment, it's wise to consider your overall portfolio goals in order to assess whether IPO investing is right for you, given the risks of volatility and loss.

FAQ

What are the steps in book building?

There are 5 main steps in the book-building IPO process:

1.    The issuing company hires an investment bank to underwrite the offering. The bank determines a share price value range and writes a prospectus to send to potential institutional investors.

2.    The underwriting bank invites institutional investors to submit bids on how many shares they want to buy and at what price.

3.    The book is built by sorting and summing demand for the shares to calculate a final IPO price. It’s known as the cutoff price.

4.    The investment bank is required to disclose the details of submitted bids to the public.

5.    Shares are allocated to accepted bidders.

What is 100% book building?

100% book building is a process in which 100% of the offering is done on a firm basis or is reserved for promoters and permanent employees of the issuing company.

Photo credit: iStock/PeopleImages

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