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How to do a background check on an employee, tenant, or just the person next door

How to do a background check on an employee, tenant, or just the person next door

It's great to hire new employees and expand your business, but it can be a nightmare if you hire the wrong person. What if they have a drug problem, recent felony or bench warrant? (Yes, we've had to turn down potential employees for all these reasons!)

Maybe they lied on their resume and don't have nearly the experience they claim. You'll have plenty of drama and no real help. That's why running a pre-employment background check is critical.

However, if you are performing a background check as an employer or landlord, or for credit, medical or insurance reasons, you can’t use just any site or service. Under the Fair Credit Reporting Act, if you pay a company to do a background check, you have to use a Consumer Reporting Agency. A CRA has to maintain certain standards for data protection and dispute resolution.

If you do reject a potential tenant or employee (even a semi-informal employee like a babysitter) based on a background check from a company that isn’t a CRA, you could wind up in trouble with the Federal Trade Commission.

Of course, you can perform your own free background check online with a little time and effort. Just be sure to talk to a lawyer or your human resources department first to find out what information you can legally use to disqualify a candidate. You can also run a background check on yourself to see what a potential employer might find.

If you don't have the time to do it yourself, though, it's best to get a professional involved. Let's look at how to find one that won't get you in trouble.

Next page: How to find a CRA
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