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When doing background checks, you must be careful not to invade the privacy of applicants -- and to respect the legal limits that apply to certain types of records and information. For example, some states don't allow employers to use arrest records in making job decisions. In response to the recent economic downturn, some states also restrict an employer's right to check an applicant's credit report or use a negative report as a basis for not hiring an applicant. For more information, see Nolo's article Running Background Checks on Job Applicants.