R3 Score wants to bring the background check into the modern age - Technical.ly Baltimore

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R3 Score wants to bring the background check into the modern age

With a financial analysis tool, the Baltimore company is looking to evolve the criminal background check into something more nuanced and equitable. It's now a publicly-traded company.

Laurin Leonard is the CEO of R3 Score.

(Courtesy photo)

R3 Score, a Station North-based company birthed out of reentry-focused social enterprise Mission:Launch, is working to get the formerly incarcerated hired, and access to better loans to start their own ventures and businesses.

As with many other businesses, everything changed for the company at the start of the pandemic. R3 Score took part in a 2019 accelerator cohort run by Techstars, but every contract had lined up to pilot R3 Score coming out of the program cancelled. To ensure the survival of the company, R3 Score became a publicly-traded company in September of 2020.

“As an entrepreneur there’s always these moments of, this is interesting because this is our business,” Laurin (Hodge) Leonard, cofounder and CEO of R3 Score, told Technical.ly about the decision to go public. “You seek out the best possible data, you add inputs, you make the best choices with the information that you have, and you find a way to grow your business and do good.”

The company’s work and technology remains: R3 Score is a platform that businesses can use for Fair Credit Reporting Act (FCRA)-compliant criminal background and credit checks. It provides two unique scores that contextualize a criminal history and credit score. The criminal history score is from one to ten, and accounts for factors like getting certifications in prison, severity of the offense, and how long ago the offense was and establish a risk factor score for businesses. The second score is an alternative credit score, ranging from 300 to 850. It is based off of a comparison to individuals with a similar financial history. The credit score accounts for people that spend money in ways that a traditional credit score don’t capture as data.

“R3 Score as a company is deeply committed to modernizing legacy risk models,” Leonard said. “[Legacy risk models] for the most part rely on pretty stale data. A criminal background check is a historical snapshot. It tells you if a person has any associated criminal justice data. It doesn’t account for any additional data footprints they’re making along the way.”

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Even the definition of arrest record is nebulous, but the stigma is real. To the average person, an arrest record would mean you were tried and convicted for a crime by a jury of your peers. But in reality, a person could show up on a criminal background check for just a felony arrest and, if a state police agency so chooses, a misdemeanor, per the FBI’s standards for a criminal record.

That quirk of definition where a felony arrest results in a criminal record — whether it leads to a conviction or not — leads to the commonly reported figure by the Wall Street Journal and criminal justice advocacy groups that over 70 million or 30% of U.S. citizens have a criminal record. R3 Score is seeking to bring a more balanced view of formerly incarcerated people.

"The trend line is by the year 2030, 50% of the adult working population will have a criminal record if we don’t disrupt the status quo."
Laurin Leonard, R3 Score

So far, R3 Score functions in both the real estate and lending spheres. It is used by The Aequo Fund, a firm founded by Baltimore real estate developer Ernst Valery which is working to level the playing field and give access to the most vulnerable and excluded by traditional capital institutions and processes that marginalize minorities of color, women and immigrants. Community development financial institution Baltimore Community Lending is another institution that uses R3 Score. Next, R3 Score wants to be used in hiring.

“The trend line is by the year 2030, 50% of the adult working population will have a criminal record if we don’t disrupt the status quo,” said Leonard. “Thats one of the things that’s interesting and exciting about [R3 Score.] It can be used anywhere we’re assessing people, and we use criminal background checks as a major gatekeeper for licensing, education, housing, jobs, and banking.”


Donte Kirby is a 2020-2022 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Robert W. Deutsch Foundation. -30-
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