What is a Background Check?

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Updated · Aug 13, 2023

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April Grace Asgapo
Joined June 2023 | LinkedIn
April Grace Asgapo

April is a proficient content writer with a knack for research and communication. With a keen eye fo... | See full bio

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In America, 96% of employers conduct background checks. Performing screenings uncover critical details organizations and individuals might want to know about a person. 

38% of companies implementing background checks want to mitigate future workplace criminal incidents. Other reasons include fulfilling legal compliance and skill screening. 

If you plan on conducting a background check soon, read on to cover some of the facts you need to know about it. 

Defining a Background Check

📖 Definition

According to Cambridge Dictionary, a background check examines a person’s past, such as education and work history. 

This type of screening uses third-party resources to scan available public records, school information, criminal records, and more.

Employers don’t only require capable workers. They also like them to be trusted with trade secrets and not pose safety threats. 

Background checks are included in their recruitment process to ensure they hire the right person for the role. 

How Background Check Works

It’s important to note that there are several types of background checks.

How each is carried out depends on the intention. A criminal background check is different from a routine background check for employment. 

Here's a process sample of how to do a background check in a pre-employment set-up:

process sample of how to do a background check

Step 1. Wait for HR to come up with the list of final candidates. 

Background checks should not be arbitrary. Each candidate should be screened. However, conducting a background check for 50 applicants can take time and effort. 

Opt to wait for the final candidates to be drafted. That way, you only conduct a background check on a few selected candidates. 

Step 2: Inform the candidate of the background check. 

Inform the applicant about the background check as part of the hiring process and communicate the screening process and required information. 

Email them a copy. Encourage them to disclose any concerns they want to be cleared. This will provide context for the background check later.

Here’s a typical list of information you want to be checked on a candidate:

  • Criminal records
  • Social security validation
  • Address history
  • US terror watch list
  • Sex offender registry check
  • Educational verification
  • Credit 
  • Motor vehicle records

Step 3: Let them sign an authorization for the background check. For legal purposes, candidates should sign to authorize the employers to proceed with the background check.

Here’s an authorization text template from Texas:

authorization text template from Texas

It’s important not to force candidates to sign. However, you must inform them that an incomplete hiring process makes them ineligible. 

📝 Important Note Before Implementing a Background Check!

Discuss with your legal team the laws regarding pre-employment background checks within your state and federal law. Ensure the background check process is aligned with the legal parameters set by the state. 

Step 4: Start the background check by reviewing the candidate’s references. 

78% of applicants lie about their resumes. One effective way of checking the reliability of a resume is by calling references. 

Consider creating a ready-made list of questions to ask. Make sure it’s relevant to the position. Here’s a sample list of questions background checks might ask:

  • What is your relationship with the candidate?
  • Would you recommend this candidate?
  • When did Employee X start working with the company?
  • What is the reason for the termination or voluntary resignation?

Step 5: Complete the rest of the background check process by hiring a professional or doing it yourself. 

Here’s how each option goes:

Option A: Hiring a professional background checker offers the following benefits:

  • It saves time.
  • Details are accurate.
  • All federal, state, standard, and local laws regarding performing background checks are considered.   

Option B: If you plan to do the background checking yourself, the work will look similar:

  • Corresponding constantly with relevant departments such as HR and legal. 
  • Learning the screening process by researching and collating online information. 
  • Constantly checking that the strategy aligns with what the law requires.
  • Using various website-based tools to review credit, criminal records, employment records, etc.
  • Looking up profiles on social media. 
  • Making sure your process aligns with what the law requires.

Step 6: Inform the applicant if you decide not to hire. 

If you found a reason not to hire, inform the candidate of that information. Inform them why the company decided not to proceed with the application for transparency.

Also, allow the applicant to rebut before officiating the rejection statement. This way, they can clarify or add more information about their information.

Types of Background Checks

There are several types of background checks. Companies or organizations may use a combination or a particular background check depending on the position or applicant.

Here are some of the most utilized background checks:

Types of Background Checks

1. Identity Verification

This is the basic form of a background check, which aims to confirm that the person is who they say they are. Companies routinely verify identity for legal purposes to avoid hiring unauthorized persons to work in the US.

The easiest way to verify someone’s identity is to request multiple forms of identification. You can ask for two from any of the following IDs:

  • Driver’s license
  • Social Security card
  • Passport

Here are other ways of verifying identity:

a. Biometric readers

These devices read people's biometrics through fingerprints to identify them in real time. It can also scan for irises, facial recognition, and voice recognition.

b. Phone verification

Ask a few standard questions such as name, age, address, etc. It’s also essential to follow intuition when conducting phone verification. 

Listen carefully for red flags such as incorrect or unreliable information and mismatched statements.

c. Credit Bureau Authentication

Check a person’s identity through credit bureaus. These companies store consumer credit information. 

2. Criminal Record Checks

Running background criminal checks at all levels: local, state, and federal, allows you to see all court data connected to the person. 

Here are the specific types of criminal background checks that should cover all bases:

a. District or county-level criminal records check 

Most criminal cases are stored at district or county courts. Most of the cases are violations of state-level criminal laws only. 

This is the best starting point for checking a person’s criminal record. 

b. National criminal records check

This inquiry widens your search for felony records that the person might have committed in other states. 

c. Sex offender registry check

Each state holds centralized information about persons with a sex offender record. This was made to protect communities, especially children, from pedophiles. 

d. Global homeland security search

Global homeland security facilitates a global terror watch list.

✅ Pro Tip:

Anybody can process a criminal background check, but not everyone, at any time, may use the data gathered for employment decisions. 

Some states have reservations about using a criminal record as a basis for treating a prospect or worker. 

For instance, the San Francisco Fair Chance Ordinance prohibits employers from asking about convictions until after a conditional offer of employment. 

3. Past Employment Verification

This is a crucial background check inquiry confirming a candidate’s experience and suitability for the role. 

It gives insight into several things at once, such as records of job stability, technical skills, scope of work, leadership viability, work style, etc. 

Here are the basic details you’ll gather from employment history verification:

  • Job start and end dates. 
  • Positions filled
  • Reasons for termination
  • Reasons for exit

There are different ways to verify employment history. Some are:

  • Subscribing to public records businesses like Intelius or Instant Checkmate. 
  • Do-it-yourself method, where you or an HR member contact each workplace mentioned in the applicant’s resume. 

4. Education Check

Many firms consider education checks last. However, exaggerated academic achievement and education warrant a closer look. 

Specific roles (e.g., attorney, doctor, etc.) require a standard set of educational qualifications. 

5. Reference Check

References are contact persons in the last resume section. Employers call those references, often past managers, to ascertain qualities such as professional competencies, attitude, etc. 

These reference checks are often done through phone calls, but employers send questionnaire-containing emails nowadays. Crucial roles like VP involve in-person meetings. 

🎉 Fun Fact: Companies sometimes use a back-door reference check to add credibility to the data. This involves contacting people who weren’t listed as a reference.

6. Drug Test

There are roles where conducting periodic drug tests is essential. Such positions are industry-specific, such as transport drivers, pilots, etc.

Drug tests determine if banned or illegal substances exist in the person’s body. Some metabolites drug tests are looking for are methamphetamines, tetrahydrocannabinol in marijuana, Cocaine, Opiates, Phencyclidine, etc.

7. Credit Background Check

This type of check examines credit history as valuable data can be sourced from agencies like credit bureaus. 

Credit background checks are performed to assess if a person is financially responsible. It’s a requirement for most senior roles in financial services industries.

Third-party agencies are usually the ones that do credit checks. Some information revealed are debt records, mortgages, student loans, late payments, etc. 

👍 Helpful Article: Looking for the best background check sites of 2023? TechJury provides an in-depth comparison of the top 10 Best Background Check Sites today. Read the article to learn more.

8. Driving Record

This type of background check extracts old records of DUIs, traffic accidents, driving record points, traffic violations, etc. Again, it’s a good signifier of how responsible a person is. 

You would need the following information about the person to run the test correctly.

  • Full name
  • Date of birth
  • Address
  • Driver’s license number
  • Place and date of issue

This may be one of the last background checks to make, but it’s necessary for a driving role. 

9. Social Media Check

Mainly considered an accessory type of background check, a person’s social media profile adds to the well-roundedness of the assessment. 

Employers sometimes observe social media posts to scan for sexist, racist, and homophobic stances and comments. 

There are risks to social media checks as they can sometimes be unreliable, and some accounts are unverified.

Levels of Background Checks

There is no one-size-fits-all solution to background checks. Hence, background checks are categorized into levels according to the depth of details. 

There are four background check levels: Level 1, Level 2, Level 3, and Level 4. 

Each level requires a different length of time to complete. Naturally, the more intense or in-depth a check is, the more time it requires.

This section reveals what each background check level entails and the type of information you gather for each. 

Level 1

This is the most common and basic background check. It generally refers to state-only name-based checks. Identity verification is an example of a Level 1 background check. 

Level 1 may be the least in-depth, but it’s a requirement among all hiring positions. 

Level 2

The level 2 background check emphasizes county records and the addition of a federal criminal court record search. 

This background check covers all counties with candidates living for seven years or more. It’s also suitable for entry-level professional positions.

📝 Note: The Fair Credit Reporting Act (FCRA), under section 605, limits background screening companies from including consumer reports older than seven years. 

Level 3

This type of background check level is an in-depth report that involves data gathering from state and national registries. 

Reports from this level will include nationwide criminal records check, past employment, reference checks, and drug screening. This background search is suitable for mid to high-management positions. 

Level 4

The level 4 check is the most comprehensive among all levels. It is used for executive positions and for promoting an employee to the executive level. 

Level 4 checks include all level 3 assessments in addition to the following: 

  • Federal criminal search
  • Bankruptcy search
  • Financial Screening 
  • Media search
  • Federal and county civil records
  • Drug and health screening

Here’s a summarized table of the scope of each background check level:



Types of Check Included


State-only check.

  • Identity verification
  • Employment history
  • Basic education check


Every county where the candidate lived.

  • Criminal records
  • Past Employment
  • Reference checks
  • Drug screening 



  • Criminal records
  • Past Employment
  • Reference checks
  • Drug screening 



  • Federal criminal search
  • Bankruptcy search
  • Financial Screening 
  • Media search
  • Federal and county civil records
  • Drug and health screening

The Legality of Background Checks

Except for comprehensive medical history or genetic information, it’s perfectly legal to ask questions about a person’s background.

When using a candidate or employee’s information in your hiring or work decisions, you must comply with specific laws. 

These laws, such as the Equal Employment Opportunity Commission (EEOC), protect applicants and employees from discrimination and unfair employer judgments. 

🎉 Fun Fact: Among the 3,485 discrimination charges filed in EEOC from 2022, disability leads by 37.2% of cases.  

Working with a company that does the background check requires conformity with the Fair Credit Reporting Act (FCRA) parameters. 

It’s important to review state and municipality laws if background checks are part of the hiring process. 

Below are some of the legal considerations for each stage of background checking:

Stage 1: Before Obtaining Background Information

Here are the EEOC and Federal Trade Commission (FTC) rules to remember before proceeding with the background check. 


According to the EEOC, it’s illegal to do a background check for an employment decision based on the following:

  • Race
  • Color
  • Sex
  • Religion
  • Disability
  • Genetic information
  • Age


Getting background information through third-party sources requires pre-planned procedures. These are:

  • Informing the employee that the data you’re about to search will be used as a decision factor in hiring. 
  • Draft a written notice of the background check and all the information you plan to get. It should be in a stand-alone format. 
  • Get the candidate or employee’s written permission to do a background check. This can be attached to the notice. Certify to the company you’re working with that you have already fulfilled the following obligations:
  • Notified the applicant and obtained their permission. 
  • Complied with all FCRA requirements. 
  • Vowed never to discriminate or misuse data following federal and state equal opportunity laws. 

Stage 2: Using Background Information

In this stage, you have already obtained the background check report. Here’s how to legally use them according to EEOC and FTC standards. 


EEOC warns employers not to use the extracted data to discriminate against anybody for employment. 

This means the standards and qualifications you set for a particular position should apply to everyone regardless of ethnicity, race, gender, etc. 

Be prepared to make exceptions for people with disabilities. Give them a chance to demonstrate how they work.


Suppose you’re not hiring an employee because of data gathered from a professional background checker. In that case, there are additional requirements to fulfill. 

A. Before taking an adverse employment action

  1. Give a copy of the consumer report that served as the basis of his termination or employment rejection. 
  2. Grant a copy of A Summary of Your Rights Under the Fair Credit Reporting Act. This summary is given by the company who sold you the report. 

These actions from your end are meant to let the affected person review the report and give him a chance to explain. 

B. While executing the adverse employment action

If you’re proceeding with the termination or the decision not to hire, you must tell the person orally or in writing the following that:

  • The applicant was rejected or terminated because of specific information from his background check report. 
  • The company name, address, and contact details of the company that sold that report.  
  • The company that sold that report didn’t partake in any employment decisions. 
  • The person has the right to dispute the accuracy and completeness of the report. 
  • They get a free report from the company that sold the information within 60 days. 

Stage 3: Disposing of Background Information

These are legal reminders to note after the adverse employment action has been completed. 


  • Any employment records must be kept for one year. This can be extended for two years, depending on particular situations. 
  • If the person files a charge of discrimination, preserve the records until the case concludes. 


After satisfying all applicable recordkeeping requirements, you may dispose of the background reports. 

The law requires the disposal method to be secure. One way of fulfilling that is by burning, pulverizing, or shredding them.

Electronic copies should be deleted from all storage in the PC’s recycle bin. 

Here’s a video iteration of how to legally conduct background checks for your hiring process. 

YouTube Video: HR Basics: Background Checks - YouTube (5:11-9:50)


Background checks complete the hiring process because it discloses information not commonly discussed during interviews. 

There are several types and levels of background checks. The best level and type depend on the information you want searched and how in-depth you want it to be.


What are employers looking for in background checks?

They typically seek criminal records, credit history, employment history, or any information relevant to the position. 

Does the US embassy do background checks?

Yes. The US embassy conducts background checks on all visa applicants. 

What causes a red flag in a background check?

Any undisclosed information relevant to the job or contrasting statements will cause red flags in a background check. 


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