In general, an employment background check can verify identity, check driver’s and credit history, check criminal records, confirm education credentials, and more. It’s smart to run a background check on yourself because it can help unearth errors and inaccuracies in your public records. Once it does, you can take steps to correct them. You can respond and even anticipate inquiries in the context of an employment background check.
Reasons Employers run a Background Check
More than a quarter of employers tell CareerBuilder a single poor hire cost their organization in excess of $50,000. That said, the main components of a background check are a credit report, ID verification, criminal records, and verification of details of your employment history.
Credit History
Credit bureaus prepare credit reports using a number of sources to collect information. Banks and other financial establishments, for example, give credit bureaus data. These, in turn, keep them in records. Not all credit bureaus have the same information, though. Generally, the information they dispose of includes credit inquiries, public records, tradelines, and, identifying information such as one’s date of birth, name, and address.
Credit reporting agencies will furnish a list of credit inquiries made in the past, which identifies lenders and retailers that might have asked for a consumer’s credit report. Credit reports can reveal warning signs, such as previous bankruptcies. An employer will take these into account, especially if the position comes with a degree of financial responsibility. Excessive spending or debt is a sign of financial irresponsibility.
Tradelines reveal accounts with loan providers. The data they show might include types of accounts, such as auto loans, mortgage, and credit card. They will provide information about when the account was opened, the current balance of the account, the credit limit or loan amount, and the person’s payment history.
Employment History
To make sure the data on your resume is valid, a potential employer will want to have it verified. The number of applicants who lie on their resumes is not insignificant. Information subject to verification can include when and where you’ve worked, your salary, and your position.
Social Security and Identity Verification
A background check can reveal whether your SSN is valid, whether it’s really yours, and whether someone else uses or has used it in the past. To get this information, your employer or a third party appointed by them will search the records of the Department of Homeland Security. Your address can also be checked through identification verification.
Criminal Records
If it is determined that a company knew or should have taken measures to find out that an employee had a criminal record, it faces negligent hiring claims in the event this person commits a crime. By revealing criminal records, an employment background check protects business owners.
These background checks might yield information about federal, state, or county criminal offenses, but the majority of offenses are prosecuted on the county level.
The violations that can be reported include misdemeanor convictions, dismissed charges, current pending charges, acquitted charges, and/or felony convictions.
Additional Information
A business owner might need further information depending on the type of job. Additional searches include education verification, drug screening, motor vehicle, and driving records, reference checks, employment history, and other options.
What Can You Do to Maximize Your Chances?
Before the interview, it is wise to get a copy of your public records. You can get a report for free from one of the national consumer report providers. Honesty is the best policy when it comes to background checks. The employer will find out if there’s something you’re trying to hide. Address any thorny matters with them as soon as possible if you are sure they will come up in your background check.
As mentioned in the beginning, the price of a wrong hire can be hefty. Reports of the U.S. Department of Labor show it can exceed a third of a person’s earnings in the first year. This can amount to tens of thousands, depending on the job’s salary rate.
Termination expenses are the main reason for these high costs. If a former employee takes legal action, the business might face litigation costs. It is also woefully costly to replace an unfortunate hire. The company will probably need to pay for employment testing, training courses, orientation, and more services.
