Background Check Terms You Should Know

Background checks are a standard part of hiring for many companies, and they are increasingly used for housing applications and when purchasing firearms. As these checks become more routine, any person’s odds of going through a background check increase. And while the process can make one nervous, especially if they have never gone through one in the past, it can help if you understand what to expect.

Some common terms you will see when undergoing a background check may include:

Background Check: A background check involves looking into a person’s history, including criminal records, employment records, social media accounts, and financial records. The scope of a background check is often dictated by federal and state laws and may also be impacted by the reason for the background check. For instance, positions that require driving may include driving records in the background check.

Fair Credit Reporting Act: The Fair Credit Reporting Act, or FCRA, is the primary federal law that governs the process of background checks. This law was established to ensure fairness in the hiring process and protect applicants’ privacy. One of the primary provisions requires that the applicant be informed of the information found in a background check and whether it prevented them from being hired. This law also ensures individuals have a process to dispute inaccurate information.

Summary of Rights: The FCRA also refers to a Summary of Rights document, which must be provided to a job candidate when a background check is completed. This summary informs the applicant of their rights under the FCRA, including:

• The right to be informed that a background check will be performed.
• The right to give written consent before the results of a background investigation isprovided to employers.
• The right to know what is found in the background check.
• The right to dispute incomplete or inaccurate information.
• The right to see their credit report if one is included in the scope of the background check.
• The right to know whether the information revealed in the background check was used in making a hiring decision.

Dispute: Candidates who find inaccurate or incomplete information in their background report have the right to contest this information by filing a dispute with a Consumer Reporting Agency (CRA). This agency has 30-45 days to investigate the claim.

Adverse Action: Adverse action refers to the scenario where an employer or landlord uses the results of a background check to make decisions. If a background check impacts the employer or landlord’s decision about the candidate, the employer or landlord may then have the right to take adverse action by refusing to hire or rent to the candidate.

Pre-Adverse Action: Pre-adverse action notifications must be sent to any candidate that may be subject to adverse action. This notice ensures the candidate can file a dispute if any of the information used as the basis for the adverse action is incomplete or inaccurate.

Consumer Reporting Agency (CRA): Credit reporting agencies are organizations that collect information about consumers and provide this information to third parties. All consumer reporting agencies must follow the provisions in the Fair Credit Reporting Act.

Verification: Before hiring a new employee, an employer will want to verify that the information provided on their application and resume is correct. Verification services are within the scope of background checks. The verification process usually includes investigating their employment and education history, professional and personal references, and credentials and licenses. The background check company may contact previous employers and schools and interview references during this process.

Authorization Form: The Fair Credit Reporting Act requires that applicants provide the company’s written permission before the employer can legally conduct a background check. An authorization form is often used to gain this consent.

Adjudication: Adjudication within the background check process refers to evaluating a candidate’s background to ensure they meet the company’s employment requirements. The adjudication process is often completed automatically now using software that sorts candidate results based on the company’s policies, applicable laws, and industry regulations.

Equal Employment Opportunity Commission: The EEOC is the federal agency that establishes statutes designed to eliminate discrimination in hiring. Any potential discrimination may be reported to this agency, which the EEOC will then investigate.

Equal Employment Opportunity: This term refers to a series of EEOC regulations. It dictates that “individuals cannot be excluded from any participation, advancements, or benefits due to race, color, religion, sex, national origin, or any other action that cannot lawfully be the basis for the employment action.

For more information about background checks, contact USA Fact today!

USA Fact Global Screening Services provides comprehensive background and criminal checks for employers that comply with federal and local laws. By helping you eliminate high-risk applicants through tailored solutions, USAFact enables you to create a safe and productive work environment and a foundation for future success.