How to Read a Background Check Report

The credit report section shows the applicant's credit history as reported by the major credit bureaus. Key elements include the credit score, payment history, current balances, credit utilization, public records (such as bankruptcies and judgments), and collections accounts.

For tenant screening, the most important factors are payment history and any balances owed to previous landlords or utility companies. A pattern of late payments — even on non-housing accounts — is a meaningful predictor of future non-payment.

A low credit score alone is not necessarily disqualifying. Look at why the score is low. A score depressed by high utilization on revolving credit is different from a score depressed by a history of missed payments and collections.

For employment screening, credit reports are most relevant for positions involving financial responsibility, access to cash or sensitive financial data, or fiduciary duties. Many states restrict the use of credit reports in employment decisions — check your state's law before ordering a credit report for employment purposes.

The criminal history section shows records of arrests, charges, and convictions in the jurisdictions searched. Each record will typically show the offense, the date, the jurisdiction, the disposition (conviction, acquittal, dismissed, etc.), and the sentence.

Focus on convictions, not arrests. An arrest without a conviction is not evidence of wrongdoing and should generally not be used as a basis for adverse action. Some states prohibit the use of arrest records in screening decisions.

Evaluate convictions in context. Consider the nature and severity of the offense, how long ago it occurred, the applicant's age at the time, and any evidence of rehabilitation. A single conviction from many years ago is very different from a pattern of recent offenses.

Be aware of expunged and sealed records. If a record has been expunged or sealed under state law, it should not appear on the report — and even if it does, you generally may not use it as a basis for adverse action.

The eviction history section shows records of eviction filings and judgments in the jurisdictions searched. This is one of the most predictive data points in a tenant screening report — a prior eviction is a strong indicator of future eviction risk.

Distinguish between eviction filings and eviction judgments. A filing means a landlord initiated the eviction process; a judgment means the court ruled in the landlord's favor. Some filings are resolved without a judgment — the tenant may have paid the overdue rent, or the landlord may have dismissed the case.

Some jurisdictions restrict the use of eviction records, particularly filings that did not result in a judgment. Check your state's law before using eviction filings as a basis for denial.

The identity verification section confirms that the applicant is who they say they are. It typically includes an SSN trace — which verifies that the Social Security Number provided matches the name and date of birth on file — and an address history.

The address history is useful for two reasons. First, it confirms that the applicant has disclosed all of their previous addresses, which is important for ensuring that the criminal and eviction searches cover all relevant jurisdictions. Second, discrepancies between the disclosed address history and the SSN trace can be a red flag for identity fraud.

If the identity verification section shows a significant discrepancy — for example, the SSN does not match the name, or the address history shows addresses in states the applicant did not disclose — investigate before proceeding.

A background check report is a tool, not a verdict. The information it provides must be evaluated in context, in compliance with applicable fair housing and employment laws, and against your written screening criteria.

Apply your criteria consistently to every applicant. If you approve an applicant with a prior eviction, you must be prepared to approve every applicant with a similar eviction history. Inconsistent application of screening criteria is one of the most common sources of fair housing complaints.

When you take adverse action based on a background check, follow the required FCRA adverse action notice process. Provide the applicant with a copy of the report, a summary of their FCRA rights, and notice of the adverse action.

If you have questions about how to interpret a specific result, contact Background Check Solutions. Our team is available Monday through Friday, 8am to 5pm CST, at 1-512-451-2734.