How to Conduct a Background Check

How to Conduct Background Checks: Step-by-Step Employer and Tenant Guide

Conducting a background check correctly requires following a specific legal sequence. Skipping steps — particularly the FCRA-required consent process — exposes you to liability. This guide provides the exact workflow for employers and landlords, from first contact to final decision.

Employer Workflow: The Seven Steps

1. Identify the scope — decide before the search what you will check (criminal only? credit? employment verification?) and establish a written policy that applies consistently to all applicants for the same position.
2. Provide a standalone disclosure — before requesting any report from a Consumer Reporting Agency (CRA), give the applicant a written disclosure that you will obtain a consumer report. FCRA requires this be a standalone document — it cannot be buried in the employment application.
3. Get written authorization — the applicant must sign and date an authorization form. Keep this on file. A verbal or checkbox authorization is not sufficient under the FCRA.
4. Order the report from the CRA — provide the CRA with the applicant's full legal name, DOB, SSN, and address history. Confirm the CRA is accredited by the PBSA (Professional Background Screening Association).
5. Review the report — evaluate results against the specific job requirements. Do not share the report with hiring managers who don't need it.
6. Pre-adverse action process (if applicable) — if you plan to reject based on the report, send: (a) a copy of the report, (b) the FTC's Summary of Rights under FCRA, and (c) a reasonable time to dispute (minimum 5 business days recommended).
7. Final adverse action notice (if proceeding with rejection) — send written notice naming the CRA, providing their contact info, and stating the CRA did not make the decision.

Ban-the-Box Compliance: When Can You Ask?

In jurisdictions with ban-the-box or fair chance ordinances (currently 37 states + 150+ cities), the sequence is: job posting → application → interview → conditional offer → background check → individualized assessment → final decision. The criminal history question cannot appear on the application or be asked before a conditional offer is extended. Violation penalties range from $500 per applicant (Philadelphia) to private right of action (California's Fair Chance Act). Check NELP's Clean Slate Clearinghouse (nelp.org) for the current list of jurisdictions and their specific requirements.

Landlord Workflow: Tenant Screening

1. Establish written tenant selection criteria before listing the property — credit score minimums, income-to-rent ratio, criminal history policy, rental history requirements. Post this publicly if required by local law (Seattle, for example, requires posting criteria).
2. Provide disclosure and get authorization — same FCRA requirement as employers; get signed consent before ordering a tenant screening report.
3. Order from a permissible purpose CRA — tenant screening CRAs like TransUnion SmartMove, Experian RentBureau, or local services provide credit + criminal + eviction reports designed for housing.
4. Evaluate using your pre-established criteria — apply criteria consistently to every applicant; document your decision in writing.
5. Adverse action if rejecting — provide the required adverse action notice naming the CRA. For housing, also check whether local "source of income" anti-discrimination laws apply (many jurisdictions prohibit rejecting Section 8 voucher holders).

Self-Screening: Running a Background Check on Yourself

Running your own check before applying to jobs or housing gives you time to correct errors and prepare explanations. Free sources: FBI Identity History Summary ($18 — not free but authoritative), AnnualCreditReport.com (free credit report from all three bureaus), state court website (search your own name), sex offender registry (confirm you are not erroneously listed), county assessor (verify no liens or judgments filed against you). Paid comprehensive self-checks: many CRAs including Checkr, Sterling, and First Advantage offer consumer self-check products for $25–$75.

Industry-Specific Requirements