What Does a Background Check Consist of? The Ultimate Guide

Background checks have become a ubiquitous part of modern life – whether you‘re applying for a job, looking for housing, or even going on a date, there‘s a good chance someone is scrutinizing your history. But what exactly are they looking for? What information is included in a background check, and where does it come from?

In this ultimate guide, we‘ll break down all the elements that can be included in a background check, from criminal records to credit reports to social media profiles. We‘ll explore how this information is gathered, who is using it to make decisions, and what rights individuals have in the process. Armed with this knowledge, you‘ll be prepared to handle background checks from any side of the equation.

Background Check Basics

At its core, a background check is an investigation into an individual‘s history and activities used to determine their suitability for a particular role or opportunity. The exact information included can vary widely depending on the purpose of the check and the laws governing its use.

Background checks are used for a variety of purposes, including:

  • Employment screenings
  • Tenant applications
  • Loan and credit decisions
  • Volunteer and charity work
  • Online dating

According to a 2021 study by the Professional Background Screening Association, 94% of employers conduct some form of background check on job candidates. Background checks have become more prevalent and comprehensive in recent years due to several factors:

  • Readily available online data sources
  • Heightened security concerns
  • Stricter regulatory requirements in many industries
  • Liability and negligent hiring concerns

However, the growth of background screening has also brought increased scrutiny around privacy rights, accuracy issues, and potential for discriminatory use. Later in this guide we‘ll examine some of these concerns and what protections exist for individuals.

Criminal History Checks

For many people, "background check" is synonymous with a criminal history check. This is indeed one of the most common and consequential elements of a background report. Arrests, charges, and convictions can have major implications for employment, housing and other opportunities.

Criminal background checks may include information from a variety of sources at the federal, state, and local levels:

  • National criminal databases
  • State and county criminal court records
  • Sex offender registries
  • International criminal records
  • Arrest logs and police reports

It‘s important to note that while arrest records may be reported, the Equal Employment Opportunity Commission (EEOC) has advised against making hiring decisions based on arrests that did not lead to convictions, as this can have a disproportionate impact on minorities.

Reporting periods for criminal history also vary by state and type of record, typically ranging from 7 to 10 years. However, some types of convictions (such as violent felonies) may be reported indefinitely.

According to a 2021 survey, 69% of employers say a criminal conviction would influence their hiring decision, with violent crimes, sexual offenses, and embezzlement ranking as the most concerning categories. The "ban the box" movement has pushed to delay criminal history inquiries until later in the hiring process to avoid discrimination.

Employment Verification

Confirming an applicant‘s past work experience is another core function of background checks. This process aims to verify key details about an individual‘s employment history, including:

  • Past employers
  • Dates of employment
  • Positions held
  • Reason for leaving
  • Eligibility for rehire

Employers may also contact references to further vet a candidate‘s experience and performance. According to a 2019 survey by HR.com, 82% of employers check at least some references, though only about 30% check all.

The same study found that 48% of job seekers have lied on a resume at some point. Common employment history discrepancies uncovered in background checks include:

  • Embellished job titles or responsibilities
  • Inaccurate employment dates
  • Omitted jobs
  • False reasons for leaving
  • Made-up employers

Most employment verification looks at a candidate‘s past 7-10 years of experience. Unlike some other background check components, employment history information can typically be reported indefinitely. However, some states have proposed limiting reporting of older records.

Education Verification

Education history is another area frequently targeted by resume lies and exaggerations. As such, a thorough background check will often seek to confirm an applicant‘s:

  • Schools attended
  • Degrees obtained
  • Dates of attendance
  • Fields of study
  • GPA

The education verification process typically involves direct outreach to the institution‘s registrar to validate details. Some universities may have additional requirements or fees to release information.

Uncovering false education claims on a background check is a major red flag for employers. A 2020 survey by Statista found that 69% view lying about education on par with lying about criminal history in terms of negative impact on hiring decisions.

There is no national database of education records, so screeners must contact each institution individually. This can be time-consuming, especially for degrees obtained internationally. Some employers use education verification services to outsource the process.

Credit History Check

Credit reports are another component that may be included in certain background checks, most commonly for jobs involving finance, budgeting, or cash handling. A credit check will detail a person‘s:

  • Credit accounts and payment history
  • Outstanding debts and public records
  • Inquiries into their credit
  • Negative items like late payments, collections, or bankruptcies

The federal Fair Credit Reporting Act (FCRA) imposes strict rules on the use of credit history for employment purposes:

  • Checks require written consent from the applicant
  • Applicants must be notified if information in their credit report may impact a hiring decision
  • Background check providers must follow accuracy and reporting guidelines

According to the National Association of Professional Background Screeners, only about 16% of employers use credit history checks in their hiring process. Several states have also introduced laws limiting the use of credit information in employment decisions.

Additional Background Check Components

Beyond the "big three" of criminal, employment and education checks, background reports may dive into a variety of other areas depending on the use case and position, such as:

Motor Vehicle Records

Jobs that involve driving a company vehicle will almost certainly involve a check of the applicant‘s driving history, including accidents, citations, license status and suspensions.

Professional License Verification

Roles that require industry licensing or certifications (healthcare, legal, financial services, etc.) will include steps to verify an applicant‘s claimed credentials with the relevant licensing boards.

Civil Court Records

Legal entanglements like lawsuits, liens, or judgments may appear on a background check, especially for jobs involving sensitive information or fiduciary duties. Reporting on civil cases varies widely by state.

Reference Checks

Reaching out to an applicant‘s professional and personal references is a common way to gather more qualitative input on their background and character. About 61% of employers conduct at least some reference checks according to HR.com.

Social Media Screening

The use of social media in background checks is on the rise but remains controversial. According to a 2021 CareerBuilder study, 66% of employers say they use social networking sites to research candidates. Any information gathered from social profiles must adhere to non-discrimination guidelines.

Drug Screening

Pre-employment drug tests have become a standard hiring step in many industries. Medical and recreational marijuana laws have added new complexities to evaluating test results. Drug screening is separate from the main background check process but may be a concurrent step.

International Background Checks

Employers hiring for overseas positions or screening candidates with international backgrounds will need to navigate the myriad screening regulations and data sources of other countries. This can be a particularly complex and time-consuming process.

The Background Check Process and Candidate Rights

With the scope of contemporary background checks spanning so many sensitive areas, it‘s important for both screeners and individuals to understand the governing laws and best practices around their use. Two key pieces of legislation provide protections for candidates in the screening process:

The Fair Credit Reporting Act (FCRA)

Enforced by the Federal Trade Commission, the FCRA regulates the collection, dissemination, and use of consumer information in background checks and credit reports. Its provisions include:

  • Requiring written consent for checks and clear disclosure of an individual‘s rights
  • Ensuring maximum possible accuracy in records and providing ways to dispute errors
  • Limiting reporting periods for certain negative information
  • Mandating adverse action notifications if a person is denied a job or other opportunity based on background check findings

Failure to comply with FCRA requirements can result in lawsuits, fines, and reputation damage for employers. Between 2011-2021, over 41,000 lawsuits were filed citing FCRA violations.

Title VII of the Civil Rights Act

Regulated by the EEOC, Title VII prohibits employment discrimination based on protected characteristics like race, color, religion, sex, or national origin. This law also has major implications for background checks, as screeners must ensure their policies do not disproportionately impact any protected groups.

The EEOC has issued guidance urging individualized assessments rather than blanket policies excluding candidates with criminal records or poor credit. Employers should consider the nature and gravity of offenses, time passed, and relevance to the job.

Background Check FAQs

To wrap up our deep dive into what background checks consist of, let‘s address some common questions on the topic:

How far back does a background check go?
Reporting periods vary by component and state laws, but 7-10 years is typical for criminal and employment records. Some states have shorter limits for certain offenses.

How long does a background check take?
The full process can range from 3-14 business days depending on scope. Checks involving manual outreach to employers or schools tend to take longer. Some databases can return instant results.

Can you fail a background check?
There‘s no standardized "pass/fail" criteria as each employer and position will have different standards. However, certain negative items like felony convictions, serious driving violations, or false credentials are likely to be disqualifying in many cases.

Do background checks show terminations?
A separation categorized as a termination may appear if the employer discloses it. But many companies limit responses to dates of employment and job titles to avoid defamation liability.

What causes a red flag on a background check?
Common reasons for concern include criminal convictions, discrepancies between the background report and resume, failed drug tests, poor credit history, or negative employer references.

Conclusion and Key Takeaways

Background checks are a multi-faceted and ever-evolving area that requires diligence from both screeners and candidates to ensure fair, accurate, and legally compliant results. This guide has examined the myriad elements that can be included, from criminal records to credit reports to professional references.

Key takeaways:

  • Background check components and procedures vary widely based on the organization and role
  • Criminal history, employment and education verification are the most common elements
  • FCRA and EEOC regulations provide important candidate protections in the screening process
  • Screeners must carefully balance the need for relevant information with anti-discrimination and privacy laws
  • Candidates should be prepared to address any potential red flags and know their rights

As data sources expand and the regulatory landscape shifts, background screening will continue to adapt. But with knowledge of the core elements covered here and a commitment to fair, individualized assessments, employers and individuals can successfully navigate the process. After all, a thorough and lawful background check is in everyone‘s best interest to ensure a safe and honest environment for work, housing and beyond.