Editor’s note: This post was originally published in May 2018. It has been updated with new information.
10 Types of Background Checks and What They Include
What is a background check?
A background check is a process a person or company uses to verify that a person is who they claim to be. Background checks provide an opportunity for someone to check a person’s criminal record, education, employment history, and other past activities in order to confirm their validity. Whether you’re applying for a job, looking for a new apartment, or purchasing a firearm, you may have to undergo a background check.
There are several different types of background checks used for different situations. To help you understand each type and what is in a background check, here is a list of the 10 most common types of background checks and what they each consist of, including:
GoodHire offers a full suite of background checks and employment screening services.
Employers run background checks to avoid hiring someone who may pose a threat to the workplace or become a liability to the employer. According to HR.com, 96% of employers conduct one or more types of employment background screening.
An employment background check typically takes place when someone applies for a job, but can also happen at any time the employer deems necessary. For example, an employer may require annual or semi-annual drug tests or criminal background checks for their employees to help create a safe and secure workplace.
To run a pre-employment background check, the employer needs the candidate’s full name, date of birth, Social Security number (SSN), and current or past address, as well as the candidate’s consent to run the check.
Typically, an employment background check includes information and records from the past seven years, although some states allow up to 10 years. Learn more about how far back background checks go in your state.
An employment background check can include, but is not limited to, a person’s work history, education, credit history, motor vehicle reports (MVRs), criminal record, medical history, use of social media, and drug screening.
If the position is specialized, applicants and employees may undergo further screenings. For example, when someone is applying to be a financial advisor, public accountant, or to work at a bank, the employer may check the applicant’s financial history, as well as any certifications or licenses they claim to possess.
It’s illegal to run an employment background check on the basis of an applicant’s or employee’s race, national origin, color, sex, religion, disability, genetic information, or age.
Further, the Fair Credit Reporting Act (FCRA) requires employers to comply with certain regulations to ensure that the background check process is done fairly. For example, employers must get written permission from applicants and employees and let them know how they might use information found in decisions about their employment.
Additionally, if the employer chooses not to hire someone because of information found in a background check, it must send the candidate a notice that includes a copy of the report used to make the decision, plus a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act.”
With this advance notice, the candidate has a chance to review the report for errors as well as explain negative information, such as gaps in their employment history, convictions, and criminal offenses.
Employers typically outsource employment background checks to a third-party company that has access to the necessary databases, including police records, credit reports, medical records, and more.
It’s important for employers to work with an FCRA-compliant company, such as GoodHire, and follow recommended guidelines. Accredited employment screening vendors will advertise that they are accredited by the Professional Background Screening Association (PBSA).
The cost of an employment background check can depend on what the employer wants to include for review. A basic criminal check can cost as little as $30 per person, and a more thorough check can cost $80 or more. Many employment screening vendors, including GoodHire, offer discount pricing for bulk orders.
A criminal background check is often required in situations where a person or organization needs to know about major criminal activity, including violent or sex crimes, fraud, embezzlement, or felony convictions before making a decision regarding employment, adoption, military enlistment, a firearm purchase, and more.
Eighty-two percent (82%) of employers who run background checks are looking for criminal records that may indicate whether the candidate could pose a threat to customers or create an unsafe work environment.
Depending on the industry, such as healthcare, there may be regulations against hiring certain felons if their conviction is relevant to the job.
However, for the formerly incarcerated, a criminal record is a barrier to reentering the workforce, making it much more difficult for ex-felons to rehabilitate into society. In an effort to increase employment opportunities and decrease recidivism rates, the federal government offers incentives to employers for hiring convicted felons through the Work Opportunity Tax Credit program.
A criminal background check may include the following record searches:
- National criminal databases
- Sex offender registries
- County criminal courts
- Domestic and global watch lists
- Federal and state criminal records
Different states have different variations of criminal background checks. Examples include a level 1 background check, which is a state-only name-based check and employment history check and a level 2 background check, which is a state and national fingerprint-based check and consideration of disqualifying offenses.
What do different criminal background checks cover? Download our guide, “All About Criminal Records” and dig into the details.
Often, many of these searches are included in a basic background check. However, some background check services may charge an additional fee to check for aliases or to search federal, state, and county criminal records in addition to national databases.
Any time a person purchases a firearm from a licensed importer, manufacturer, or dealer, the seller must perform a universal background check via the National Instant Background Check System (NICS) to determine whether a prospective buyer is eligible to purchase a firearm.
Reasons why a person may not pass a gun background check include felony offenses, certain criminal convictions and misdemeanors, fugitives or persons with open arrest warrants, domestic violence convictions, or in the country illegally, among others.
While the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) oversees the universal background check, actual NICS background checks are conducted by the FBI.
Since universal background checks were mandated by the Brady Handgun Violence Prevention Act of 1993 and launched by the FBI in 1998, more than 230 million firearm background checks have been made, leading to more than 1.5 million denials.
The federal gun background check process isn’t required, however, for sales within state lines by an unlicensed seller, including private-party transactions. Thirteen states, and Washington, D.C., require universal background checks at the point of sale (POS) for all sales and transfers of all classes of firearms, whether purchased from licensed dealers or unlicensed sellers. Two additional states require POS for handguns, but not rifles or shotguns.
Mandated by the Social Security Act, the Office of Inspector General (OIG) at the U.S. Department of Health & Human Services maintains a list of excluded individuals and entities (LEIE), also called a sanctions list, to prevent people who have committed healthcare-related crimes to work in federally-funded healthcare programs.
Many employers run the OIG background check before hiring an employee or entity. In addition, they may routinely conduct checks post-hire to ensure their employees are not get added to the list once hired. This background check is free and can be completed on the OIG website by searching the employee’s or candidate’s name. Search results include date of birth, address, and reason for exclusion and can be confirmed with a Social Security number (SSN).
If an employer fails to run the OIG background check and hires someone whose name is on the sanctions list, the employer could be forced to pay civil monetary penalties. The employer is also potentially at risk for safety and liability issues.
People and entities are added to the sanctions list if they’ve been convicted of certain types of criminal offenses, including:
- Medicare or Medicaid fraud
- Other offenses related to Medicare, Medicaid, State Children’s Health
- Insurance Program (SCHIP), or other state healthcare programs
- Patient abuse or neglect
- Felony convictions for other healthcare-related fraud, theft, or other financial misconduct
- Felony convictions related to controlled substances
In the following cases, the OIG has the discretion to add individuals or entities to the list, or leave them off:
- Misdemeanor convictions related to healthcare fraud other than Medicare or state health programs, or fraud in a non-state program funded by any federal, state, or local government agency
- Misdemeanor convictions relating to controlled substances
- Suspension, revocation, or surrender of a license due to professional competence, professional performance, or financial integrity
- Submission of false or fraudulent claims to a federal healthcare program
- Engaging in unlawful kickback arrangements
- Defaulting on health education loan or scholarship obligations
- Controlling an excluded entity as an owner, officer, or managing employee
E-Verify is used by employers to verify the identity and employment eligibility of newly hired employees. The online check compares information from the I-9 form new employees are required to fill out with government records to confirm that the employee is authorized to work in the U.S. A new I-9 form was issued in October 2019 which became mandatory on May 1, 2020.
Since 2009, the federal government has mandated its use for some federal contractors, and some 22 states require it for certain public and private employers; however, E-Verify is voluntary for most employers.
Form I-9 and E-Verify are similar in their purpose, but E-Verify takes the process one step further to make sure new employees are authorized to work in the country. Here are some key differences between the two:
Enrolled employers can perform an E-Verify check through the E-Verify website.
Launched in 1999, the Automated Fingerprint Identification System (AFIS) stores more than 35 million sets of fingerprints, mostly submitted by law enforcement agencies.
A fingerprint background check, or Identity History Summary, is often used in conjunction with other background checks and is most often used as part of the pre-employment screening process. A fingerprint background check is mandatory for government-run institutions such as public schools, airports, law enforcement agencies, hospitals, and fire departments.
It may also be required to be eligible to receive certain professional licenses, including jobs in real estate, medical care, finance, casinos, and pharmacies.
An employer can run a candidate’s fingerprint against the AFIS to get an accurate read of a person’s criminal history from authorized criminal justice agencies, including arrests and disposition reports. And, since it’s virtually impossible to fake fingerprints, AFIS will also include records for potential aliases.
If a fingerprint background check is required for employment, applicants will visit an authorized local fingerprint business or government organization to have their fingerprints scanned (or inked) and submitted.
- Criminal history
- Federal employment
- Military service
If an employer in the U.S. is considering hiring someone who has recently lived, worked, or studied in a different country, the employer may want to run an international background check in addition to its regular employment background check.
With an international background check, the employer can get international criminal records, education, and employment verification. Depending on the information employers need, they may pay for one, two, or all three. Costs vary by service provider, but GoodHire’s pricing for international checks ranges from $14.99 to $59.99, depending on the country.
Each country requires varying documentation to perform the check, such as full name and a copy of a government-issued ID, such as a passport. It’s important for employers to work with a service provider that can communicate what’s needed quickly. GoodHire provides international background checks for 223 countries.
A credit background check is a record of a person’s credit-to-debt ratio and shows how someone has managed credit and bill payments in the past. Also called a credit report, it’s a standard requirement when applying for a car or home loan, credit card, or any other type of loan. Many landlords also check credit reports to verify whether a person applying to rent property has a history of good credit and may be more likely to pay rent on time.
Additionally, some jobs require a credit background check, especially for positions in the financial services industry where the employee would manage money, or has access to money on a daily basis.
A candidate’s financial background is important in an area where fraud and embezzlement are possible. Employers may consider someone with poor credit, tax liens, or significant debt to be more tempted to take advantage of the employer’s trust.
With a credit background check, the person or company running the report can view the applicant’s credit report but not their credit score. A credit report shows the applicant’s full credit history, including:
- Payment history
- Civil judgments
- Tax liens
- Unpaid bills in collections
- Recent credit inquiries
The FCRA requirements mentioned in the Employment Background Checks section of this article apply to credit checks. Employers must get written permission from applicants and employees and inform them that information in their credit background checks may be used in decisions about their employment.
If an employer chooses not to hire someone because of information found in a credit background check, it must send the person a notice that includes a copy of the report used to make the decision, plus a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act.”
A credit background check typically costs around $30, but you may be able to run a check for free by requiring the applicant to purchase a copy of their credit report and grant you access.
Eleven states, including Washington, D.C., and the municipalities of Chicago, New Orleans, and New York City, prohibit employers from using credit reports as part of the background checking process.
If you’re interested in seeing what employers see when they run your background check, a personal background check can do that for you. Depending on the service provider, you can choose which checks or searches you want to perform, and which ones you don’t need.
For example, you can run a personal background check to see if your name appears in any criminal, traffic, or sex offender databases. You can also do an SSN trace to see where you’ve lived and worked, and to see a copy of your own credit report.
Finding out what shows up on your background check is a great way to address potential errors you find. It’s common to find mistakes in public information databases. If you discover and address potential errors before an employer or creditor sees them, you could save yourself from missing out on an opportunity to get a job or borrow money.
Credit report errors are the number one complaint to the Consumer Financial Protection Bureau, the agency that makes sure banks, lenders, and other financial companies treat consumers fairly.
Personal background check costs can range from $20 to $60, depending on how extensive of a search you want. GoodHire’s personal background check service offers personal background checks starting at $19.99.
A professional license background check, or an education verification check, verifies that the applicant does indeed possess a valid license as claimed. This is an important step in helping to protect the employer from negligent hiring claims.
Certain industries rely on professional licenses to ensure that people working in that industry have the experience, knowledge, and credentials required to perform the job.
For professional license background checks, background screening companies typically contact the applicable industry or state licensing board to verify that the license is held and hasn’t lapsed or expired, that the license is in good standing and that there are no restrictions or violations associated with the license.
Industries that require a professional license background check include:
- The financial services industry, including financial planning, real estate, accounting, banking, and insurance
- Home contractors, including plumbers, builders, and electricians
- Education, including teachers, professors, and administrators
Background Checks Work to Improve Trust and Safety
The purpose of background checks is to provide helpful information about a person’s history to assess whether they may pose a threat to others or whether they are generally trustworthy—or not.
While a person’s past actions do not necessarily predict their future actions, background checks are increasingly common and are meant to help create more trust and safety in society and the workplace.
If you’re looking for employment screening, find out how GoodHire’s background check services are simply better.
The resources provided here are for educational purposes only and do not constitute legal advice. We advise you to consult your own counsel if you have legal questions related to your specific practices and compliance with applicable laws.