How to Choose a Background Check Company

Introduction

Selecting the right background check company is a critical decision that can impact your hiring success, rental property management, or personal safety. This comprehensive guide will walk you through the entire process of evaluating and choosing a background screening provider that meets your specific needs while ensuring legal compliance.

What You’ll Accomplish

By following this guide, you’ll learn how to:

• Identify your specific screening requirements
• Evaluate potential providers based on key criteria
• Compare services, pricing, and turnaround times
• Ensure FCRA compliance and legal protection
• Make an informed decision that serves your long-term needs

Who This Guide Is For

This guide is designed for:

• HR professionals and hiring managers
• Small business owners
• Property managers and landlords
• Individuals requiring personal background checks
• Anyone responsible for vendor selection in their organization

What You’ll Need

Before starting, gather:

• Your screening requirements and budget
• List of positions or purposes requiring checks
• Current screening procedures (if any)
• Legal requirements for your industry/location
• Decision-making timeline

Before You Start

Prerequisites

Understanding these fundamentals will streamline your selection process:

Legal Framework Knowledge

• Fair Credit Reporting Act (FCRA) basics
• State and local screening laws
• Industry-specific regulations
• Ban-the-box legislation in your area

Internal Requirements

• Types of searches needed (criminal, credit, employment, etc.)
• Volume of screenings per month/year
• Budget constraints
• Integration needs with existing systems

Preparation Steps

1. Define Your Screening Scope
– List all positions requiring screening
– Determine search depth for each role
– Identify any specialized searches needed

2. Establish Your Budget
– Calculate current screening costs
– Project future volume needs
– Consider total cost including hidden fees

3. Create Evaluation Criteria
– Must-have features vs. nice-to-have
– Compliance requirements
– Technology preferences

Information to Gather

Compile the following information:

• Current vendor contracts and pricing
• Past screening issues or challenges
• Feedback from hiring managers or property managers
• Turnaround time requirements
• Customer service expectations

Step-by-Step Process

Step 1: Identify Your Specific Needs

Start by creating a comprehensive list of your screening requirements:

For Employers:

• criminal background checks (county, state, federal)
• Employment verification
• education verification
• professional license verification
• Drug screening coordination
• Credit checks (where legally permissible)

For Landlords:

• Tenant screening reports
• Eviction history
• Credit reports
• Income verification
• Reference checks

For Individuals:

• Personal Background Checks
• Pre-employment self-checks
• identity verification needs

Step 2: Research Potential Providers

Create a list of 5-7 potential providers by:

1. Searching Online
– Use terms like “FCRA compliant background check company”
– Read industry publications and reviews
– Check professional associations

2. Seeking Recommendations
– Ask industry peers
– Consult HR networks
– Review LinkedIn discussions

3. Evaluating Credentials
– PBSA (Professional Background Screening Association) membership
– Better Business Bureau ratings
– Industry certifications

Step 3: Evaluate Compliance Standards

This is non-negotiable. Each provider must demonstrate:

FCRA Compliance

• Written certification of compliance
• Clear adverse action procedures
• Proper disclosure and authorization forms
• Dispute resolution processes

Data Security

• SOC 2 Type II certification
• Encryption standards
• Data retention policies
• Breach notification procedures

Legal Expertise

• In-house compliance team
• Regular legal updates
• State-specific guidance
• Industry-specific knowledge

Step 4: Compare Services and Features

Create a comparison spreadsheet including:

Search Capabilities

• Database coverage and sources
• International screening options
• Continuous monitoring availability
• Social media screening (if needed)

Technology Platform

• User interface ease
• Mobile accessibility
• API/integration options
• Reporting capabilities

Customer Support

• Hours of operation
• Response time guarantees
• Dedicated account management
• Training resources

Step 5: Analyze Pricing Structures

Look beyond base prices to understand:

Fee Structures

• Per-search pricing
• Volume discounts
• Monthly minimums
• Setup or annual fees

Hidden Costs

• Court access fees
• Rush service charges
• Integration costs
• Additional user fees

Value Considerations

• Included services vs. add-ons
• Report comprehensiveness
• Rerun policies
• Bulk pricing options

Step 6: Test Turnaround Times

Request specific turnaround commitments for:

• Standard criminal searches
• Employment verifications
• Education verifications
• Complete reports

Compare promised times with actual performance by:

• Requesting sample reports
• Checking customer reviews
• Running test searches
• Asking for performance metrics

Step 7: Request References and Demos

Before making a final decision:

1. Schedule Product Demos
– Test the user interface
– Review sample reports
– Explore integration options
– Ask specific scenario questions

2. Contact References
– Similar-sized organizations
– Same industry contacts
– Long-term customers
– Recent implementations

3. Review Sample Reports
– Clarity and comprehensiveness
– Accuracy of information
– Compliance elements
– Actionable format

Step 8: Make Your Decision

Score each provider on:

• Compliance (30%)
• Service offerings (25%)
• Technology (20%)
• Pricing (15%)
• Customer service (10%)

Document your decision rationale for future reference.

Tips for Success

Expert Recommendations

Start with Compliance
Never compromise on FCRA compliance. A cheaper non-compliant provider will cost more in legal issues.

Consider Scalability
Choose a provider that can grow with your needs rather than one that barely meets current requirements.

Prioritize Accuracy
Fast, cheap, and accurate—you can only have two. Prioritize accuracy over speed or price.

Value Transparency
Select providers who are upfront about limitations, pricing, and potential issues.

Time-Saving Tips

• Use RFP templates to streamline vendor evaluation
• Set up comparison calls back-to-back
• Create standardized evaluation forms
• Leverage free trials when available
• Batch similar vendor demos together

Quality Improvements

• Require sample reports before committing
• Test customer service response times
• Verify database sources and update frequencies
• Confirm dispute resolution procedures
• Review integration documentation thoroughly

Common Mistakes

What to Avoid

Choosing Based on Price Alone
The cheapest option often lacks compliance features, comprehensive data, or adequate support.

Ignoring Integration Needs
Failing to consider how the service integrates with your current systems leads to inefficiency.

Overlooking Compliance
Non-FCRA compliant providers expose you to significant legal liability.

Skipping the Fine Print
Auto-renewal clauses, fee increases, and termination penalties can cause problems later.

How to Fix Errors

If you’ve chosen the wrong provider:
1. Review your contract for exit clauses
2. Document service issues
3. Prepare data for migration
4. Time the switch to minimize disruption
5. Ensure overlap to prevent gaps

Troubleshooting

Common Issues and Solutions:

• Slow turnaround: Establish SLA agreements
• Inaccurate data: Verify source quality
• Poor support: Escalate to management
• Hidden fees: Negotiate transparent pricing
• Integration problems: Request dedicated support

Legal Considerations

Compliance Requirements

Federal Requirements

• FCRA compliance for all employment and tenant screening
• EEOC guidelines for employment decisions
• FCTA requirements for credit checks

State and Local Laws

• Ban-the-box regulations
• Salary history restrictions
• Credit check limitations
• Cannabis-related restrictions

Rights and Obligations

Your Obligations:

• Obtain proper consent
• Provide required disclosures
• Follow adverse action procedures
• Maintain confidentiality
• Ensure data security

Candidate/Applicant Rights:

• Disclosure and consent
• Copy of report (upon request)
• Dispute inaccuracies
• adverse action notices
• Data privacy

Documentation Needs

Maintain records of:

• Vendor certifications
• Compliance procedures
• Consent forms
• Adverse action letters
• Dispute resolutions
• Data security measures

Next Steps

What to Do After Selection

1. Implementation Planning
– Create rollout timeline
– Train users
– Update procedures
– Test integrations

2. Monitor Performance
– Track turnaround times
– Measure accuracy
– Gather user feedback
– Review compliance

3. Optimize Usage
– Refine search packages
– Adjust user permissions
– Streamline workflows
– Maximize ROI

Related Processes

• Developing screening policies
• Creating adverse action procedures
• Training hiring managers
• Establishing audit protocols

Additional Resources

• FCRA full text and summaries
• State law databases
• Industry best practices
• Compliance checklists
• Sample policies and forms

FAQ

Q: How long does the selection process typically take?
A: Plan for 2-4 weeks from initial research to final decision, allowing time for demos, reference checks, and internal approval processes.

Q: What’s the average cost per background check?
A: Costs vary widely from $20-$200+ depending on search depth and components. Basic criminal checks typically range from $20-$50, while comprehensive packages including verification can exceed $100.

Q: Can I use multiple background check providers?
A: Yes, some organizations use different providers for different needs (e.g., one for employment, another for volunteers). However, this increases complexity and compliance management.

Q: How often should I review my background check provider?
A: Conduct annual reviews of service quality, pricing, and compliance. Consider full vendor evaluations every 3-5 years or when significant needs change.

Q: What if my chosen provider is acquired or goes out of business?
A: Include service continuity clauses in contracts, maintain data backups, and have a contingency plan identifying alternative providers.

Conclusion

Choosing the right background check company requires careful evaluation of compliance capabilities, service offerings, technology, and support. By following this systematic approach, you’ll select a provider that protects your organization while meeting your screening needs efficiently and cost-effectively.

Remember, the lowest price rarely provides the best value. Focus on finding a provider that balances comprehensive searches, legal compliance, user-friendly technology, and responsive support.

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