Looking for a background check service? Here's everything you need to know about how to choose one. If you're in a hurry, just scroll down to see our best picks and read our staff reviews of the ones we would choose if we were you. You can also see a full list of background check service vendors and a breakdown of how we chose our best picks here.
It's better to be safe than sorry when hiring new employees: You probably have a lot riding on the success of your business, so bringing in the wrong person can have some pretty grave consequences. Although most organizations may be able to tolerate the consequences of hiring an underqualified candidate or someone who is a bad cultural fit, they might not be able to survive the ramifications of welcoming in an employee who is dangerous or dishonest.
To help ensure new hires don't have any skeletons in their closets that could negatively affect an employer, many businesses use background check services as part of the hiring process. In fact, according to the Society for Human Resource Management, nearly 70 percent of employers conduct criminal background checks on all of their job candidates, and 47 percent conduct credit checks.
But choosing the right background check service can be a challenge. Many are inexpensive but are not technically qualified to do employee background checks. It's important to know what you're getting into before you choose one. We researched several and came up with our picks for the best business background check services.
Best Background Check Service for:
|Small Business Overall||Very Small Businesses||Do-It-Yourself||Household Employees|
|Full Review >>||Full Review >>||Full Review >>||Full Review >>|
Multiple service packages
Can purchase one at a time
Specializes in household employees
Outstanding customer service
Several bundled packages
Automated consent forms
Candidates can review info
Our best picks include three full-service background check services (good for employee background checks) and one online background check service. For a full reviews of less expensive, DIY online background check services, visit our sister site, TopTenReviews. See box below to understand the difference.
Do you need to conduct a background check?
Businesses that don't use background checks when hiring new employees are putting themselves at risk, said Lester Rosen, founder and CEO of Employment Screening Resources. When a new employee who hasn't been properly vetted is hired, employers are basically welcoming a stranger into their business, he said.
"That stranger has access to your customers, your cash, your IT — everything," Rosen told Business News Daily. "It would make as much sense to do that as it would to walk down the street and give the keys to [your] front door to a total stranger just because when you talk to that stranger, they look good or sound good."
Rosen said conducting background checks doesn't mean you are assuming everyone who applies for a job at your business is a bad person.
"The idea is that, as they used to say in politics, 'You want to trust, but verify,'" Rosen said. "You want to hire based on information, as well as instinct."
Rosen told us that even though there is a cost associated with conducting background checks, it is a lot cheaper than hiring an employee who steals or hurts somebody.
"Most of the time, most of the people pass the background check," Rosen said. "But if you get someone who has a problem, the employer will be very happy they dodged the bullet and didn't bring someone into the workplace who is dangerous, unfit, dishonest or unqualified."
What are you looking for in a background check?
When you are conducting background checks on job candidates, there are several things you should look for, including the following:
- Criminal history: The first, and probably most important, thing to look for is whether the applicant has a criminal background that would put your business in danger. When it comes to criminal records, employers want to look for convictions of serious crimes that would affect the candidate's ability to do the job, Rosen told us. Just having a criminal record, under new federal laws, isn't enough of a reason to disqualify the candidate from consideration, he said.
We questioned Mark Briggs, of the Arizona-based Briggs Law Group, on the new federal laws, and he said that in order to disqualify a candidate from consideration because of a criminal history, employers must have a clear connection for why someone's criminal record makes him or her unfit for the job for which they are applying.
"For example, having five speeding tickets in the past two years may be a valid reason to not hire a delivery driver, but their misdemeanor vandalism conviction 10 years ago probably is not," Briggs said. "If the employer has inappropriately relied on something like an arrest report to deny an applicant a job, they can be in big trouble."
- Education and past work verification: Confirming that applicants have been truthful about their previous employers and where they went to school is a big part of the background check process, said Mike Aitken, vice president of government affairs for the Society for Human Resource Management. This will not only help verify whether the candidate has the right skills and background for the job, but will also tell you if the candidate has a penchant for lying.
"It can be a red flag to the employer if the person is being less than honest," Aitken told us.
- Credit checks: Credit is another area that some employers check during a background screening. Aitken said credit checks can provide an overall financial picture of the candidate but should only be considered for candidates who are applying for roles in which they would handle large amounts of money or assets, such as a chief financial officer.
"They aren't trying to play 'gotcha' and say, 'They fell behind once or twice on their credit card payment or have an outstanding student loan debt,'" Aitken said. "It is to check their overall ability to meet their financial obligations."
Other things Rosen told us you may want to examine in a background check include the candidate's sex offender status, motor vehicle records, if they will be in a position that requires large amounts of driving, and Social Security traces to show past addresses of the candidate and if any aliases were used.
One background check area you need to be careful with, however, relates to social media profiles. Briggs told us that although employers might be tempted to check out a candidate's Facebook or Instagram page in order to learn more about his or her judgment and character, they could be opening themselves up to lawsuits.
"An employer might learn from a person's Facebook page that they belong to a particular religious group or have a disability that is not visually apparent," Briggs said. "Knowing that information can open up an employer to liability, because they are not allowed to ask about those things in an application or interview for a job, and once you know something, you can be accused of considering that information illegally when making the hiring decision."
Types of background checks
When we started researching background check services, we found that there are two very distinct types: online background check websites that allow you to conduct searches on your own, and pre-employment background check firms that do all of the investigations for you. There are a number of differences between the two types, including the background information provided, the cost and the potential legal concerns.
Online background check websites
We found that online background check websites were among the easiest and cheapest to use. All you need to do is sign up online and type in the name of the person you are searching for. You are then instantly provided with a variety of details, including criminal history, on each person. Depending on how much of the information you want to look at, you could be charged anywhere from $10 to $50 per background check. The information these websites provide include the following:
- Misdemeanor and felony convictions
- Sex offenses
- Details on arrests and plea deals
- Civil legal judgments
- Address history
- Marriage records
- Social Security number verification
- Social network profiles
If all you are after is a criminal record of a potential employee, you may be inclined to think this is the best route to take. However, these online background check services do come with a risk: The vast majority of these websites specifically say they are not to be used as part of the employment screening process because the websites are not compliant with the Fair Credit Reporting Act, which spells out the federal laws pertaining to employee background screening.
Sean Bigley, an attorney whose law practice focuses entirely on background investigation issues, said businesses that use these websites for pre-employment background checks should do so at their own risk.
"Employment laws vary by state, but there are several states (notably, California) that limit or bar employers from asking about a job applicant's criminal history," Bigley told Business News Daily. "Given the wealth of information available on these websites, I can also foresee claims of age or race discrimination."
He added that many do-it-yourself Internet background search engines produce reports that are filled with duplicate, inaccurate and irrelevant information, which can be worse than having no background check at all.
"It is worth noting that much of the information on these websites is wildly inaccurate, thereby limiting the utility of the process anyway," Bigley said.
Employment background check firms
We found that pre-employment background check firms offer a much more comprehensive service. Unlike the website options, these background checks take time to complete; it isn't as simple as typing a name into a website and immediately seeing all the information you are looking for. After providing the name of the job candidate you are investigating, the firm does all of the work for you. Its representatives check for criminal convictions and verify past employment and education, as well as any other details you request. The specific details employment background check services can screen for include the following:
- Misdemeanor and felony criminal records at both the county, state and national levels
- Sex offender status
- Social Security number trace and validation
- Employment verification
- Education verification
- Reference checks
- Credit checks
- Civil record checks
- Motor vehicle records check
- Military records verification
- Workers' compensation history
- Address history
Employment background check firms provide not only this additional information, but also the assurance that the details are being given to you in a legally complaint manner. We discovered that these firms are bound by the Fair Credit Reporting Act, which, among other things, mandates that employers get written authorization from job applicants before conducting a background check and let the candidate know if anything harmful was found in the search after it's completed.
However, we found that employment background check firms are more expensive and time-consuming than online background check websites. Employment background check services typically charge between $50 and $100 per search and take between two and three days to complete the search process. The experts we spoke with said these are the most important questions to ask when choosing an employment screening firm:
- Does it have the ability to find all of the information your business needs to make your hiring decisions?
- Does the service comply and understand the Fair Credit Reporting Act?
- Are the costs reasonable?
- Does the service provide you with the necessary authorization forms for job candidates to fill out?
- How long does it take to get results?
- Does it provide clear, accurate and complete written reports?
- Is the firm accredited by the National Association of Professional Background Screeners?
The key is to find an employee background check firm that follows the law when conducting the searches, in case something during the hiring process goes awry, Rosen said. "You have to make sure you dot your i's and cross your t's, because it is heavily legally regulated," he told us.
Briggs said using a firm that doesn't follow the law can cause you some serious grief. "The two biggest negative consequences are being sued by a job applicant or employee, and being investigated and possibly fined by a government agency, such as the Equal Employment Opportunity Commission or National Labor Relations Board," Briggs said. "Defending against a government investigation or lawsuit is time-consuming and expensive."
For a summary of our best background check service and website picks and to review our methodology for choosing them, visit our best picks page here.