How Do Background Checks Work?

Background checks provide an additional layer of protection when entering a professional or personal relationship with someone you don't know well. The process, which used to be limited to enforcement agencies and private security firms, is now accessible for everyone through mainstream use of the internet. If you have been through a selection process for a job or if you ever asked for a loan, you've likely been subjected to a background check. But how does the process work? What information can a screening company get, and from where? Here's an overview:

Online Background Checks

All you need is a first and last name to start the process. Background check sites rely on artificial intelligence. Their algorithms crawl thousands of websites for matching data and then categorize it and sort it by relevance. Important sources for online background checks include public court records, social media platforms, and other government sites (such as sex offenders registries). The good thing about online background check services is that they are affordable and fast.

Criminal Background Checks

For more in-depth screening of someone's criminal history, you may need a specific criminal background check. These check databases on federal/national, state and county levels. Through a criminal background check, you get information about felonies, current, pending and closed cases and misdemeanors. There are restrictions: convictions older than seven years cannot be reported, and this also applies to expunged and sealed records. Crimes committed when someone was a child, for example, are usually sealed. A criminal background report includes crime name, date, and disposition (conviction, non-conviction, or pending). Some background check services do not report non-conviction instances.

Credit Background Checks

These, by law, are only performed by accredited reporting agencies, known as CRA's (Credit Reporting Agencies). Once the process starts, the subject of the background check receives a message asking for their express authorization (under the FCRA -Fair Credit Reporting Act- credit screening companies can't perform any checks without written consent). They may also request additional information.

Credit Bureaus (in the United States, there are three credit bureaus: Experian, Equifax, and TransUnion) gather information every time someone borrows money (through student loans, mortgages, credit cards, and personal loans). They use this data to create a credit score, which considers: Age of credit accounts, payment history, credit utilization ratio, and hard and soft inquiries. CRA's request this information and turn it into a credit report. There are restrictions as to how someone (for example, an employer) can use this information. For example, if it is used against you, you have the right to a copy of the report and full disclosure about the facts that played a role in the decision.

Benefits of Running a Background Check

• You protect yourself and your assets by getting valuable information before entering a contractual relationship

• Human Resources professionals can mitigate risks associated with negligent or litigious employees or noncompliance with professional regulations. Background checks can also help reduce turnover rates.

• Landlords can screen tenants and avoid those who have a history of evictions and/or late payments

• Financial institutions can make better lending decisions by evaluating a candidate's payment history and payment capacity

• Individuals can have peace of mind before meeting someone they met through online dating sites

Choose Reliable and Professional Screening Services 

While most background check services offer similar features, they are not all the same. Aside from the obvious differences such as speed, cost, and pricing model, there are differences in the depth of their searches, compliance with industry regulations and treatment of your personal information. Before choosing a background check service, look for reviews, and carefully read their terms of service and privacy policy. Beware of the following red flags:

1. Sites that are not straightforward about what they include on their reports or the technology they use.

2. Sites that offer to use shady or illegal techniques to obtain information

3. Sites with no refund policy

Take Control of Your Digital Footprint

Background check companies are turning to artificial intelligence for more accurate and less biased results. However, technology is not infallible, and data can be mistaken or confusing. To make sure your information is accurate, run periodical (once a year is what experts recommend) background checks on yourself and correct mistakes as soon as you find them. Also, take advantage of the free yearly credit report that you can request from all three credit bureaus.

Take the necessary steps to protect your personal information:

1. Never share personal information with strangers on social media or dating apps

2. Manage your privacy settings on each platform

3. Never share financial information online

4. Learn about common phishing techniques and how to avoid them

Information technologies offer powerful tools to protect our privacy and safety. Background check services offer cost-effective alternatives to mitigate risks and are currently industry standards in fields such as human resources and real estate.