What Causes a Red Flag on a Background Check? 8 Issues to Know

A background check can reveal valuable insights about a candidate. The key lies in understanding what causes a red flag on a background check and recognizing genuine concerns while avoiding snap judgments that could eliminate qualified talent.

For hiring managers, you want to protect your organization without letting unfounded fears drive away promising candidates. Small business owners particularly struggle to evaluate findings without dedicated HR resources. Meanwhile, job seekers with complex histories need to know how best to address past issues.

This guide breaks down what really matters when screening potential employees. We’ll explore what constitutes a true red flag, how to evaluate concerning findings fairly, and steps for handling issues productively on both sides of the hiring desk.

Table of Contents Table of Contents

1. Key Takeaways
2. What Is a Red Flag During Background Checks?
3. Common Causes of Red Flags on a Background Check
   1. 1. Criminal Records and Convictions
   2. 2. Employment History Discrepancies
   3. 3. Education and Credential Verification Issues
   4. 4. Poor Credit History
   5. 5. Professional License and Certification Issues
   6. 6. Driving Record Problems
   7. 7. Failed Drug Screenings
   8. 8. References and Professional Feedback
4. How To Address Background Check Red Flags
   1. Steps for Employers
   2. Steps for Job Seekers
5. How To Know if You've Failed a Background Check
   1. Signs Your Background Check May Have Failed
6. What To Do if You're Refused Employment Due to Errors in a Background Check
7. What To Do if You've Failed a Background Check After a Job Offer
8. Failed Background Check: What To Do Next?
   1. Common Reasons for Failing a Background Check
9. Conclusion
10. FAQs
11. References

Show Full Guide

Table of Contents

1. Key Takeaways
2. What Is a Red Flag During Background Checks?
3. Common Causes of Red Flags on a Background Check
   1. 1. Criminal Records and Convictions
   2. 2. Employment History Discrepancies
   3. 3. Education and Credential Verification Issues
   4. 4. Poor Credit History
   5. 5. Professional License and Certification Issues
   6. 6. Driving Record Problems
   7. 7. Failed Drug Screenings
   8. 8. References and Professional Feedback
Show Full Guide
4. How To Address Background Check Red Flags
   1. Steps for Employers
   2. Steps for Job Seekers
5. How To Know if You've Failed a Background Check
   1. Signs Your Background Check May Have Failed
6. What To Do if You're Refused Employment Due to Errors in a Background Check
7. What To Do if You've Failed a Background Check After a Job Offer
8. Failed Background Check: What To Do Next?
   1. Common Reasons for Failing a Background Check
9. Conclusion
10. FAQs
11. References

Key Takeaways

• Not all concerning findings automatically disqualify candidates—context and recency matter.
• Employers must balance risk management with fair evaluation and legal compliance.
• Candidates have rights regarding background check accuracy and addressing past issues.
• Clear policies help standardize how organizations evaluate potential red flags.

What Is a Red Flag During Background Checks?

A red flag during a background check signals inconsistencies, discrepancies, or concerning information that warrants deeper evaluation. Red flags can surface in any aspect of the screening process, from employment gaps to patterns in credit history.

While some red flags might instantly disqualify a candidate for certain positions, others simply prompt further discussion, and their significance varies based on the role, industry, and circumstances.

Take criminal records, for instance. A misdemeanor from 15 years ago might raise minimal concern, while recent financial fraud charges would seriously impact eligibility for banking roles. The same principle applies across verification areas—a single short employment gap reads differently than a pattern of unexplained absences. Therefore, each red flag requires careful analysis.

Most Common Causes for Red Flags on a Background Check:

1. Criminal record
2. Employment history discrepancies
3. Credential verification issues
4. Poor credit history
5. Professional license issues
6. Driving record problems
7. Failed drug screenings
8. Poor references

Common Causes of Red Flags on a Background Check

Next, we examine the specifics of what causes a red flag in a background check and screenings.

1. Criminal Records and Convictions

A criminal history ranks among the most serious red flags during screening. Reviewing criminal records requires careful attention to both legal compliance and risk assessment. According to the Equal Employment Opportunity Commission (EEOC), employers must consider:

• The nature and gravity of the offense
• Time passed since conviction or completion of sentence
• The direct relationship between the offense and job duties

Minor infractions from years past might raise minimal concerns. More recent criminal conviction records involving violence, theft, or fraud demand closer scrutiny, particularly for positions involving financial responsibility or vulnerable populations.

2. Employment History Discrepancies

Employment background checks are extremely important, and inconsistencies between reported work experience and verified details from previous employers raise significant concerns. Red flags in this category include:

• Fabricated positions or employers
• Major date discrepancies beyond simple memory errors
• Inflated job titles or responsibilities
• Undisclosed terminations

Small date variations by a few months might reflect honest mistakes. However, substantial misrepresentations about employment duration or role responsibilities signal deeper credibility issues.

3. Education and Credential Verification Issues

Educational red flags surface when claimed credentials don’t match institutional records. Common problems include:

• Degrees never earned or completed
• Attendance dates that don’t align
• Falsified academic achievements
• Unaccredited institutions or diploma mills

Studies report that 75% of HR managers have caught lies on resumes. Educational misrepresentation makes up a significant portion of these falsehoods.

4. Poor Credit History

For positions involving financial responsibilities, credit checks might reveal concerning patterns. While isolated past-due accounts might not disqualify candidates, some credit issues raise legitimate concerns:

• Multiple accounts sent to debt collection agencies
• Recent bankruptcies
• Pattern of financial irresponsibility
• Substantial outstanding judgments

It’s important to note that the Fair Credit Reporting Act (FCRA) limits how employers can use credit history information. Some states further restrict or entirely prohibit credit checks for employment purposes.

5. Professional License and Certification Issues

Roles requiring specific credentials demand verification of professional qualifications. Red flags include:

• Expired licenses
• Disciplinary actions
• Revoked certifications
• Misrepresented specializations

Licensing violations are particularly concerning in regulated industries like healthcare and finance. For example, a revoked medical license due to malpractice would clearly disqualify candidates from patient care roles. Credentials can be checked through the Federation of State Medical Boards (FSMB) website.

6. Driving Record Problems

For positions involving vehicle operation, driving history red flags might include:

• Multiple moving violations
• DUI convictions
• License suspensions
• A pattern of accidents

The Federal Motor Carrier Safety Administration (FMCSA) handles Commercial Driver Licensing (CDL). Employees tasked with driving a commercial vehicle are held to a higher standard than those operating non-commercial vehicles. Additional tests are required for specific classes and types of vehicles, such as double trailers or those with tanks. More than one serious traffic violation over a two-year period can result in a suspension of the CDL.

Even for non-commercial positions involving driving, a pattern of reckless behavior raises significant liability concerns.

7. Failed Drug Screenings

Drug test failures represent automatic red flags for many employers. Reports indicate that positive workforce drug test rates recently hit a 16-year high.

Like all factors in a background check, the importance of a failed drug screening will trigger different levels of concern depending on the role and the substance:

• Illegal drugs typically result in immediate disqualification
• Prescription medications require valid documentation
• Marijuana testing policies vary by state law and employer policy, with some organizations in legal-use states excluding it from screening

8. References and Professional Feedback

While subjective, reference checks might reveal:

• Undisclosed performance issues
• Misaligned job responsibilities
• Eligibility for rehire concerns
• A pattern of interpersonal conflicts

Reference checks reveal vital behavioral patterns that may not surface in other screenings. Studies show that past performance strongly predicts future workplace behavior. However, it’s important to recognize that people can grow and develop significantly when given new opportunities, support, and environments that enable positive change.

The relevance and level of concern for each of these red flags will depend on the position being applied for.

How To Address Background Check Red Flags

For jobseekers facing red flags, transparency works better than hoping issues go unnoticed. A proactive approach lets you frame past challenges within their full context. Consider addressing known issues during interviews rather than waiting for them to surface in background screening.

For employers, consistent evaluation standards protect prospective employees against discriminatory practices while maintaining proper risk management. The EEOC recommends conducting individualized assessments when criminal background checks raise concerns.

Steps for Employers

Document your process for evaluating red flags. This creates consistency in handling similar situations across different candidates. Consider factors like:

• Relevance to the specific position
• Time passed since incidents occurred
• Evidence of rehabilitation or corrective actions
• A pattern of behavior versus isolated incidents

Create clear procedures for discussing findings with candidates. Give potential employees opportunities to explain discrepancies or provide additional context before making final decisions.

Steps for Job Seekers

When you know your background contains potential red flags:

1. Review your own history first. Get copies of your records through a background check provider to identify potential issues before employers do.
2. Prepare documentation showing rehabilitation, education, or professional growth since past incidents.
3. Practice explaining situations clearly without becoming defensive. Focus on lessons learned and positive changes made.
4. Know your rights under the FCRA. Employers must provide copies of background checks used to make adverse decisions.

Many organizations partner with returning citizens programs or fair chance initiatives. These resources help both employers and job seekers productively navigate background check concerns.

How To Know if You’ve Failed a Background Check

Identifying a failed background check isn’t always straightforward. Unlike academic tests with clear pass/fail marks, background screenings involve multiple factors and varying employer standards.

The federal FCRA requires employers to notify candidates before taking adverse actions based on background findings. This gives job applicants a chance to address issues before making any final decisions.

Signs Your Background Check May Have Failed

1. Extended silence after initial contact
2. Withdrawal of tentative job offers
3. Receipt of pre-adverse action notices
4. Requests for additional explanations about specific findings
5. Sudden changes in interviewer communication tone or frequency

Most reputable employers follow a structured notification process. First comes a pre-adverse action notice explaining potential disqualification. This includes copies of background reports used in decision-making.

The law requires employers to wait a reasonable time (typically five business days) before making final decisions. During this period, you can:

• Review report accuracy
• Provide explanations or context
• Submit evidence of errors
• Share documentation of rehabilitation

After reviewing responses, employers must send final adverse action notices if proceeding with disqualification. These notices specify:

• The fact that adverse action was taken
• Contact information for the background check company
• Your right to dispute findings
• How to get free copies of your reports

Watch for unauthorized or illegal screening practices. For example, some states prohibit asking about arrests without convictions or using credit history for certain positions.

What To Do if You’re Refused Employment Due to Errors in a Background Check

Mistakes in background screening reports happen more often than many realize. If you spot errors that lead to employment refusal, taking quick action protects your rights and job prospects.

The Fair Credit Reporting Act safeguards your right to dispute inaccurate information. Start by requesting copies of all reports used in the decision. The employer must provide:

• A copy of the background check report
• Name and contact details of the screening company
• A “Summary of Rights” document

Review every detail carefully. Common errors include:

• Mixed files with other people sharing similar names
• Outdated or incomplete criminal history information
• Misreported dates in employment history
• Incorrectly listed educational credentials
• Mismatched personal identifiers

Contact the background check company immediately after finding mistakes. By law, they must investigate disputed items within 30 days. Be sure to submit any documentation supporting your dispute. This could include:

• Court documents showing resolved cases
• Employment verification letters
• Educational transcripts
• Identity verification documents
• Professional license records

The background screening company must notify all employers who received incorrect reports within the past two years about any corrected information.

Keep detailed records of:

• The date you discovered the errors
• All communications with employers and screening companies
• Copies of supporting documents
• Dates of submissions and responses

If employers make adverse decisions without proper notification, consider consulting with employment law specialists. Some situations might warrant legal action under FCRA provisions.

What To Do if You’ve Failed a Background Check After a Job Offer

Receiving notice of background check issues after a job offer hits hard, but immediate action can sometimes salvage the opportunity. Your response in the first few days matters significantly.

First, read the pre-adverse action notice thoroughly. This document explains which background check findings concern the employer. Under federal law, you maintain the following rights during this process:

• Access to your full background report
• Time to respond to findings (typically five business days)
• Ability to dispute inaccurate information
• Right to share contextual information

A conditional job offer means the position remains open during the dispute period. Many employers reconsider decisions after receiving additional information or context.

Take these practical steps:

1. Request a meeting or phone call with the hiring manager or HR representative.
2. Prepare clear, factual explanations concerning the findings.
3. Gather documentation showing rehabilitation, training, or professional growth.
4. Draft a formal written response addressing each raised concern.
5. Submit dispute paperwork if you find any inaccuracies.

If accurate findings triggered the failed check, focus on the following:

• Changes made since past incidents
• Professional accomplishments
• Character references
• Relevant training or education

Many employers value candid discussions about past issues. Your response might demonstrate exactly the professional maturity they seek in potential employees.

Stay professional throughout this process and maintain respectful communication even if you feel the decision seems unfair. This approach keeps doors open for future opportunities.

Failed Background Check: What To Do Next?

When you’ve failed a background check, you need to understand why and take the appropriate action quickly. Here’s what you need to know.

Common Reasons for Failing a Background Check

As discussed, a failed background check typically stems from:

1. Legitimate criminal convictions relevant to the role
2. Verified misrepresentations on your application or resume
3. Failed drug screening results
4. License or certification issues for regulated positions
5. Serious driving violations for positions requiring the operation of a vehicle

But background checks can be inaccurate, due to:

• Data entry errors by screening companies
• An identity mixup between people with similar names
• Outdated or incomplete records
• Information being reported beyond legal time limits

How To Address Background Check Issues

If you receive notice of a failed background check, follow this procedure:

1. 1. Request the Pre-Adverse Action NoticeFirst, obtain your pre-adverse action notice. The Fair Credit Reporting Act requires employers to send this notice before taking any negative action based on your background check. This package includes a copy of your background check report and a document outlining your legal rights.
2. 2. Review Your ReportTake time to examine your report in detail. Read every line, looking for mistakes in dates, names, locations, or case details. Pay attention to outdated information that shouldn’t be reported, like old arrests without convictions or civil judgments beyond the seven-year reporting limit. Mark anything that seems incorrect or needs explanation.
3. 3. Gather Supporting DocumentationBuild your case with solid documentation. Collect court papers showing resolved cases or expungements, official HR records verifying past employment, educational transcripts, current professional licenses, and any evidence of rehabilitation. Letters from professional references can also strengthen your position.
4. 4. File Your DisputeDirect your formal dispute to the right place. Submit it to the Consumer Reporting Agency (CRA) that produced your background check—its name and contact information must be included in your pre-adverse action notice. Most CRAs offer online dispute systems, but certified mail provides a paper trail. Explain each error clearly and attach your supporting documents. Be specific about what needs correction.
5. 5. Monitor Your CaseStay on top of your dispute. Consumer Reporting Agencies must investigate within 30 days but don’t wait passively. Follow up after two weeks if you haven’t heard anything. Request that they send the corrected report to your potential employer. Document every communication, including dates, names, and what was discussed.

Conclusion

Background checks provide employers with verified information to make informed decisions during the hiring process. Companies get better protection from workplace theft, negligent hiring claims, workplace violence, employee fraud, data breaches, accidents caused by unqualified workers, and harm to vulnerable populations.

So, what causes a red flag on a background check? It can be several key reasons: criminal convictions, gaps or discrepancies in employment history, failed drug screenings, expired or invalid professional licenses, or mismatched education credentials. Credit history issues may also trigger concerns for positions involving financial responsibility.

The background check process can be complex, but it’s greatly simplified when you use a background check service. For more information, check out our complete guide to employment background checks.

FAQs What happens if a background check can’t verify employment?

When employment verification fails, provide W-2s, pay stubs, or other documentation proving your work history. Many employers accept alternative verification methods.

Will an employment error on a background check cost me the job?

Not necessarily. Most employers allow you to explain discrepancies and provide correct information before making final decisions.

What should I do when a background check says my employment is wrong?

Contact the background check company immediately with proof of the correct employment dates and details. If necessary, submit a formal dispute.

References

1. Equal Employment Opportunity Commission (EEOC)
2. Fair Credit Reporting Act (FTC)
3. Federation of State Medical Boards (FSMB)
4. Commercial Driver Licensing (FMCSA)
5. Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII of the Civil Rights Act (EEOC)

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