ORIGINAL ARTICLE: In recent months, we’ve been receiving a growing number of requests from landlords, brokers, and listing agents for the inclusion of background checks in Cozy’s screening tools.
The reality is that performing an accurate background check is difficult, and not all background checks are created equal.
Whether you currently use them or not for tenant screening, it’s always good to know exactly what you’re buying, and what it might be good for.
We’ve been doing a lot of research, and I’d like to share some of what we’ve learned so far.
What is a Background Check?
In most cases, “background check” really means “criminal search.”
There are four types of criminal searches:
1. National Multijurisdictional Criminal Database Search
These searches are performed on each company’s own database of legal filings and public data, compiled from whatever sources the companies can find. They cover the entire country, but the data from one screening company to the next can vary greatly in accuracy, timeliness, and detail. These searches are usually performed on a person’s name and Social Security number (SSN), and will match any criminal cases associated with that individual.
2. County Criminal Search
Many US counties will provide public data upon request. These searches can be done in many ways, from large dumps of electronic data to mailed pieces of paper. There is no real standard, so these searches can be difficult in many cases, and outright impossible in others. For this type of search, every screening company uses the same sources, so there is no differentiation between offered services.
3. Statewide Search
Searches of this type are almost never used, as they are expensive and difficult to obtain. For most uses, they are essentially worthless.
4. Federal Criminal Search
These searches are all done on the same repository of data, called PACER (Public Access to Court Electronic Records). These searches are sometimes used for high-level hiring or security clearances, but the results contain only federal data (think Martha Stewart or Enron), so in the vast majority of searches, nothing is returned. Since everyone gets this data from the same source, there is no difference between companies providing this data.
1. Eviction Search
An eviction search is simply an expanded search on the screening company’s national database, where in addition to searching the data by the person’s name and SSN, a search is performed for the person’s name and each address associated with the person according to available public data. This type of search tends to find more data to work from, but is susceptible to error, so positive results for evictions should be verified if possible.
2. Sex Offender Search
Data on sex offenders are easy to obtain, so every screening company offers this service as part of their national database search. Sex offender searches are accurate and reliable. Anyone can use the National Sex Offender Public Website to check a name.
3. Terrorist Watch List Search
Like with sex offender registries, terrorist watch lists compiled by government are easy to access and accurate, and every screening company includes them in their national search as well.
National vs. County
In general, when there’s a positive result in a national search, it is recommended that the data be verified with an additional county search if possible, since county data will be more up-to-date and accurate as to the status of a case. Some screening services offer an automatic county search in such cases, and most offer it a la carte as well.
In many cases, when the national search comes up clear, local searches are not necessary, but if anything does come up, it is never recommended to base any credit or employment decisions on the national data alone – you should always verify at the county level.
Every screening company has the right to set their own pricing for access to the data they provide. Because many searches cost the screening company money, particularly at the county level, most companies either build those additional costs into their pricing or charge extra for additional services, sometimes depending on very granular circumstances.
For example, Checkr.io charges different rates for different counties, ranging from $1 to $65 depending on the county being searched.
Many companies have an a la carte menu for the various services they provide, and each customer must choose which services to order. It’s a tough balance to strike between cost and accuracy.
While no single company has a perfect, complete set of data to work from, the differences between screening companies can be significant depending on the quality of their respective sources for their national database.
Some have 1,000 or more sources to work from, while others may have only 100 or fewer. Since use of this data falls under the Fair Credit Reporting Act, anyone making decisions on this data is legally required to try to obtain the most up-to-date and accurate information possible.
At Cozy, we’re working toward building the best comprehensive tenant screening product on Earth, so stay tuned as we get closer to launch.
This post originally appeared on the Cozy blog.