How to Do a Background Check

Can your employees become a danger to your business?

Considering 1 in 5 Americans has a criminal record, running a background check is crucial for intelligent hiring decisions—and it is equally essential that your screening is thorough, legal, and non-discriminatory.

In this article, we’ll show you exactly how to do a background check on future hires, current employees, and even yourself.

What Is a Background Check?

Let’s start with the basics. A background check is any inquiry that confirms a person is who they say they are.

Most people will go through a check at least at one point in their lives—typically prior to getting a job. Before making a hiring decision, most companies confirm the candidate’s identity and check criminal records. This is known as a pre-employment background check, and it’s pretty much standard procedure in 2022.

Other types of background checks include a universal background check (which is normally performed before buying a firearm) and a fingerprint-based investigation, which is more in-depth and used for high-responsibility positions.

Key takeaway: Any check to confirm somebody’s identity is a background check. Most companies do a pre-employment investigation, but there are other types of background checks, too.

How to Do a Background Check?

Now that you know what they are, let’s see how you can perform one:

Employment Background Check

It can help you uncover resume lies (which are surprisingly common – 56% of people stretch the truth on their CV) or application omissions, like past convictions.

However, you must set up a fair and consistent process for screening. These checks can determine whether you hire a candidate or not. If you reject them and it turns out the background search wasn’t up to standard, you could end up in legal trouble.

Here is how you can run an employment background check without risking discrimination charges:

Step 1: Set Up Your Background Check Policy

Your first step is getting clear on your rules and documenting them in a written background check policy that covers:

• • When do you run the checks? It could be during the initial application process, after interviews, periodically during employment, etc.
  • What will you be checking? For example, SSN trace, criminal history, sex offender status, etc.
  • How will you use the employment reference check? In other words, what happens once you get the results?

• To whom do the checks apply? This policy must either apply to all candidates or specify whom you’ll be checking (and why).

Several regulators govern background checks to ensure they’re fair and non-discriminatory. To avoid problems in the future, we at Hosting Tribunal suggest you get legal counsel to confirm compliance.

Step 2: Choose Compliant Background Check Companies

To prevent inequities, the Fair Credit Reporting Act (FCRA) stipulates companies can only use a Consumer Reporting Agency (CRA) to get background information.

CRAs perform background checks on behalf of employers – and they have to maintain specific data quality standards to ensure trustworthy reporting.

When you choose a CRA, make sure they’re FCRA-compliant, as rejecting a candidate based on non-CRA information could get you in trouble.

Some of the employment reference checking companies we recommend include:

• GoodHire – it has built-in local, state, and federal compliance (and it’s one of the most user-friendly services we’ve tried).
• Accurate Now – it offers a wide range of FCRA-compliant screening services.
• HireRight – it's perfect for international companies, as it can run checks in over 240 countries and territories.

However, FCRA compliance isn’t always enough.

The Equal Employment Opportunity Commission (EEOC) oversees hiring decisions and can dispute them, especially when they affect a protected group. Local lawmakers also address HR background check policies and create a patchwork of regulations that vary depending on the specific region.

The best companies have built-in compliance with these rules, as well as fair-hiring protection to benefit candidates.

Step 3: Know What to Expect

It's crucial to keep candidates informed throughout the screening process. Before you begin, you need to:

1. Tell them that you’ll run an employment background check and that its results will impact the hiring decision.
2. Receive their written consent.
3. Provide them with the FCRA rights document – otherwise known as “A Summary of Your Rights Under the Fair Credit Reporting Act.”
4. Give them the CRA’s contact information (name, address, and phone number).

Most background checks take up to five days to complete, though basic background checks are much faster – they include readily available information, such as an SSN trace to confirm identity, as well as crime registry and sex offender database data.

Since this information is virtually at the tip of your fingers, CRAs can return it on the same day.

Once the check is done:

1. Send a copy of the background report to the candidate. Under the FCRA rules, they’re entitled to see the results.
2. Provide a pre-adverse action notice. This document says the check’s findings might lead to adverse consequences – i.e., not getting hired.
3. Allow enough time to review it. Five days is a reasonable timeframe for applicants to read through the report and check for errors.
4. Give them a chance to offer clarifying information. If there are inaccuracies, the candidate must get an opportunity to address them.

Step 4: What Happens If I Reject a Candidate?

So, the background investigation returned a red flag.

If it’s reason enough to turn down the applicant, you need to:

1. Send them an adverse action notice. This document tells job candidates that they won't be hired because of the background check results.
2. Inform candidates about their rights. They can dispute the decision. They can also receive a second copy of their background check report within 60 days of receiving the notice.
3. Specify this was your hiring decision. Clarify that the adverse reaction was not the CRA’s resolution.
4. Destroy personal information. Employee reference checks contain private data, which is why employers should securely dispose of them – shred or incinerate paper copies, and erase digital ones.

Why Not Run My Own Background Checks as an Employer?

Simple: avoiding lawsuits.

Since its results affect hiring decisions, finding out the background information yourself and rejecting a candidate based on it can be considered discrimination.

As an employer, you need a certified background check – even if the data you require comes from free, readily available sources.

Key takeaway: To run a pre-employment background investigation, you need to have a policy in place and the candidate’s consent. As it informs hiring decisions, this background check can only come from FCRA-approved CRAs.

Criminal Background Check

Do you want to know how to run a background check on someone you’re dating? Or perhaps on a potential new roommate?

Investigating their criminal background is a good idea as it can protect you from dangerous situations.

First things first, in the US, most criminal records are public. This means that, for most people, you’ll be able to dig out arrest records and additional public documents.

One way to run a free criminal background check is to physically go to the relevant state court or government agency and get the records. This is time-consuming and not very realistic, especially if the person has lived in several states, but it’s always free.

Another way would be to see what you can find online. You could use databases (like the national sex offender registry) to look up people you’re interested in. Some states provide free online access to court documents too.

Otherwise, you could hire a CRA to run a criminal background investigation on the person you’re considering.

Key takeaway: While criminal records are free, there is no national online public database for them. There are, however, specific databases you can look through. You could also hire an agency to run a more thorough criminal check on someone.

Free Background Check

Several websites offer background checks at no cost, but their services have significant shortcomings:

• • Low accuracy, since there are no human checks or record vetting.

• No accountability, given that it’s an automated, free service.

• Zero legal compliance, which makes them a no-no for work-related purposes.

That’s why we say that a 100% free background check doesn’t exist – at least not a comprehensive one.

A complete screening requires reviewing documents from multiple sources, not all of which are digitized or free to access.

Still, you could always try to do it yourself and see how much you can find out about someone.

How to Conduct a Background Check Yourself?

If you’re interested in verifying someone’s credentials – for personal or non-official reasons – but you don’t want to pay for an agency to do it, you have two options. The first is scouring:

• Search engines and social media. Beware of namesakes, though, and steer clear of scammy ‘spying’ tools for locked profiles.
• Sex offender registries. Searches through the National Sex Offender database are easy, and they don’t even require registration.
• State registries. Additional offender registries exist in different states. For example, the Kansas Public Offender Registry is readily available online.

Note: the data you gather won’t constitute a complete background check since not all sources are digitally accessible.

Your other option is asking for people to volunteer their background information.

For instance, if you’re looking for a new roommate, ask them for a credit report. Pulling that as a third person can only happen for legitimate and verifiable business reasons.

If the person requests it themselves, though, the credit report is free and doesn’t affect their credit score.

Key takeaway: You can get basic information (like an SSN trace or sex offender status) without paying for it. Free background reports online, however, are usually incomplete, with no guarantee of accuracy.

Check Yourself

Since reference checks are so common nowadays, it’s a good idea to look through public records and see what someone – especially a future employer – might find out about you.

DIY Background Check

Since we’re talking about your personal data, you don’t have to go through a CRA – you could just look for the information on your own.

Here is how you can get an (almost) free background check on yourself:

• Google your name. Review the results that come up and consider removing those you can (e.g., questionable social media posts).
• Go to online databases. Check the Dru Sjodin National Sex Offender Website, even if you’ve never committed a sex crime. A mix-up with a convicted namesake can cause problems, and it’s better to let future employers know just in case.
• View court records. All federal court records are available on PACER’s website. Registration is free, but access to case information costs $0.10 per page with a single document fee capped at $3.00. Wondering how to find public records without paying? Just go to any federal courthouse – the PACER database is free there.
• Request your credit report. You can get one from each of the three nationwide credit reporting companies for free.

Should You Hire a Company?

The downside of a free background check is that it’ll take you some time to gather all the information yourself. CRAs, on the other hand, will charge you a fee for running it, but that way you’ll know exactly what a potential employer will see.

You could also hire a background check service that’s not a CRA, given that you won’t be using the report to make any decisions that require FCRA-compliance (like hiring somebody or approving a credit, for example).

Intelius, Instant Checkmate, and TruthFinder offer some of the best non-FCRA-compliant background screening services around.

Key takeaway: You can run a background check on yourself by either digging through the documents personally or hiring an agency to do it for you. The former is cheaper (often even free), while the latter is more convenient.

Wrap Up

So, how to do a background check?

It depends on what you need it for.

If you’re hiring a new employee or screening a tenant, you’ll have to go to an FCRA-certified CRA for the information. Otherwise, rejecting candidates based on an uncertified report could get you in legal trouble.

Checking yourself is simpler, and it can often be free. You can request information from credit report agencies and courts or simulate a job background check by going to a CRA.