Checking References Before you make an offer, check the candidate's credentials.

After preliminary interviews, you should be able to narrow the field to three or four top candidates. Now's the time to do a little detective work.

It's estimated that up to one-third of job applicants lie about their experiences and educational achievements on their resumes or job applications. No matter how sterling the person seems in the interview process, a few phone calls upfront to check out their claims could save you a lot of hassle--and even legal battles--later on. Today, courts are increasingly holding employers liable for crimes employees commit on the job, such as drunk driving, when it is determined that the employer could have been expected to know about prior convictions for similar offenses.

Unfortunately, getting that information has become harder and harder to do. Fearful of reprisals from former employees, many firms have adopted policies that forbid releasing detailed information. Generally, the investigating party is referred to a personnel department, which supplies dates of employment, title and salary--period.

There are ways to dig deeper, however. Try to avoid the human resources department if at all possible. Instead, try calling the person's former supervisor directly. While the supervisor may be required to send you to personnel, sometimes you'll get lucky and get the person on a day he or she feels like talking.

Sometimes, too, a supervisor can tip you off without saying anything that will get him or her in trouble. Consider the supervisor who, when contacted by one potential employer, said, "I only give good references." When the employer asked, "What can you tell me about X?" the supervisor repeated, "I only give good references." Without saying anything, he said it all.

Depending on the position, you may also want to do education checks. You can call any college or university's admissions department to verify degrees and dates of attendance. Some universities require a written request or a signed waiver from the applicant before releasing this information.

If the person is going to be driving a company vehicle, you may want to do a motor vehicle check with the motor vehicle department. In fact, you may want to do this even if he or she will not be driving for you. Vehicle checks can uncover patterns of negligence or drug and alcohol problems. If your company deals with property management, such as maintenance or cleaning, you may want to consider a criminal background check as well. Unfortunately, national criminal records and even state records are not coordinated. The only way to obtain records is to go to individual courthouses in each county. Although you can't run all over the state to check into a person's record, it's generally sufficient to investigate records in three counties--birthplace, current residence and residence preceding the current residence.

For certain positions, such as those that will give an employee access to your company's cash (a cashier or accounting clerk, for instance), a credit check may be a good idea as well. You can find credit reporting bureaus in any Yellow Pages. They will be able to provide you with a limited credit and payment history. While you shouldn't rely on this as the sole reason not to hire someone (credit reports are notorious for containing errors), a credit report can contribute to a total picture of irresponsible behavior. And if the person will have access to large sums of money at your company, hiring someone who is in serious debt is probably a bad idea.

Be aware, however, that if a credit check plays any role in your decision not to hire someone, you must inform them that they were turned down in part because of their credit report.

If all this seems too time-consuming to handle yourself, you can contract the job out to a third-party investigator. Look in the Yellow Pages for firms in your area that handle this task. The cost averages about $100--a small price to pay when you consider the damages it might save you.

From Start Your Own Business: The Only Start-Up Book You'll Ever Need, by Rieva Lesonsky and the staff of Entrepreneur Magazine (Entrepreneur Press)