How much do you really know about the people around you? You might have a pretty good sense of the background of a sibling, spouse or that friend you've had forever, but that's usually about it.
That's really not many people. And behind the friendly smiles of the potential friend, roommates, business partners, neighbors and romantic partners you meet regularly could be all kinds of dirt waiting to get on you.
Fortunately, the Internet makes it simple to dig up that dirt so you know the real story before you get in over your head. And you can do it for little to no money.
Before I continue, I should point out a tricky fact of digging up dirt. If you are performing a background check as a landlord or employer, or for credit, medical or insurance reasons, you can't use just any service.
Know the law
Under the Fair Credit Reporting Act, 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 baby sitter) based on a background check from a company that isn't a CRA, you could wind up in trouble with the Federal Trade Commission.
You can find a fairly complete list of CRAs here. The list is helpfully divided into categories such as credit reporting, employment history, insurance, renting and so on. Note that you can request and dispute the information that these CRAs have stored for you.