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Two Types of Background Checks That Reveals Information Other Than Employment

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A background check is a way for companies to confirm that individuals or organizations are really what they claim to be. It shows how valid the information they provided by digging data on that individual or group.

While it can help in many different situations, there are different types of background checks. In addition to employment history checks, you can also find out whether an applicant completed specific degrees or learning programs related to your company.

Here we look at the types that will give you information other than the employment history of that individual.

Credit Background Checks

As the name suggests, by conducting a Credit Background Check, you explore the records of a person’s credit information. This often revolves around the credit-to-debt ratio of a person.

This is helpful if you want to know if that person has any payments in the past or bills that they haven’t paid yet. It’s also a way to discover how they use their money or credit in their lifestyle.

Some information you’ll find while conducting this kind of background checkis their payment history, tax liens, bankruptcies, unpaid bills, credit inquiries, and more.

If you decide not to hire someone due to this information, you’re required to send that person a notice that it’s because of his/her credit information.

Professional License Background Checks

Professional License Background Checks is when you dig data on the commercial background of a person. It includes checking if they have a valid license for what they do.

This is helpful for companies that are looking to invest in startups. It’s best to know if the commercial organization really has the right to operate. After all, it would complicate things for you if you invest in some shady organization.

This type of background check will also reveal whether or not the company’s employees or the applicant have completed any related learning programs. This should be a clear indication on whether or not they are up to the task.

Background checks provide you with helpful information that will allow you to steer away from threats to your company. In other words, by conducting background checks on individuals or organizations, you’re minimizing the risks of hiring on investing in that certain group.

Anatomy of a Background Check

From Visually.

4 Reasons for Conducting Background Checks on Entrepreneurs and Startups Before Investing

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Investors are known for their success in the business industry. Investing can take up many forms. Stocks, Startups, Foreign Exchange, you name it. However, often times you’ll find that investors that are only starting with this business fail and lose money.

While it’s inevitable, there’s a way for you to invest money and minimize your loss at the same time. Here we look at how background checks are important for investors.

You can expose the flaws of a person or company

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Just like stalking, you can expose the flaws of a person, or even a whole company, with just the story.

It goes without saying that flaws like criminal records, financial debts, and more will potentially threaten the reputation of your own company.

That’s why you should conduct background checks on anything that you’re planning on investing in.

You can forecast the monetization value of a business

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When you’ve been a venture capitalist or investor for a long time, you’ll find it easy to forecast the monetization value of a business.

Ask any expert investor on how they do this, and one thing they’ll tell you is conducting a background check on that organization.

You can predict the future of the startup

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For startups, their future is unknown unless you have the information you need. However, one piece of information won’t do you good.

You’ll need financial records, employment history, and more. Since background checks are conducted to dig this information, no method is more suitable for this kind of job.

How Should You Do Background Checks?

It’s important that you check the history of the founder of that specific business. It will help you learn if the organization is really trustworthy.

You should also learn how to check the founder’s past achievements, so you’ll know if he/she can actually manage the business or if he’s a complete amateur. If so, then there’s no need to invest just yet.

It’s important to remember the importance of background checks for investors. Not only will it help you maximize your profits in the long run, but it’ll also help you minimize your risks of losses.