1. Ask for the state license number and verify it yourself. Don't accept a photo of a card. Go to your state contractor board's website (search "[your state] contractor license lookup"), type in the number, and confirm the name matches, the status is "active," and there are no suspensions or disciplinary actions listed.

2. Call your city or county building department and ask one question: "Does a contractor need a local business license or registration to legally work here?" Write down the answer and the name of who told you.

3. Request the contractor's local business license or municipal registration number. In many cities this is separate from the state license and is what actually authorizes them to pull permits inside city limits.

4. Ask which permits your specific job requires — and who pulls them. A legitimate contractor names the permits without hesitation and pulls them under their own license. If they want you to pull the permit as the homeowner, that's a signal they can't.

Why the State License Passes While the Local One Fails

State boards license the trade. Your city licenses the business. These are two different systems that don't talk to each other. A contractor can hold a spotless state license and still be completely unregistered in your municipality — which means when the permit gets flagged, the fine, the stop-work order, and the re-inspection cost land on you.

Many cities also require a local trade permit or a home-improvement registration that the state never sees. A contractor who works two towns over may simply have never registered in yours.

The state license told me he was legal. Nobody told me the city required a separate registration until the inspector red-tagged the job.— homeowner, mid-project permit denial

Documents to Request Before You Sign Anything

5. Certificate of insurance — sent directly from the insurance company or agent, not a PDF forwarded by the contractor. Confirm general liability and workers' comp are active for the dates of your project.

6. Proof of bonding, if your state or city requires it. Ask for the bond number and the issuer.

7. A written scope of work with a payment schedule tied to milestones — not a lump sum due up front.

8. References from two jobs completed in the last six months, ideally in your same city so you know they've worked under your local rules.

Cross-Check the Business Itself

9. Search the business name on your Secretary of State's website to confirm it's a registered entity in good standing.

10. Search the exact business name plus "complaint" and plus "lawsuit." Also check your state board's disciplinary records and your local court's civil case lookup for unpaid subcontractors or mechanic's liens.

11. Confirm the address is real. A business that only has a P.O. box and a cell number is harder to hold accountable when something goes wrong.

The One Red Flag That Shows Up in Almost Every Bad Hire

A large deposit demanded before any work begins.

Almost every homeowner who gets burned describes the same opening move: the contractor asks for a big chunk of money up front — often "for materials" — before the first permit is pulled or the first board is cut. Legitimate contractors have supplier accounts and cash flow; they don't need you to fund their operation before they've done anything. A demand for heavy money before work starts is the single most reliable warning sign that you're about to lose it.

The cleanest protection against that trap is refusing to pay real money until real work is done — and using escrow so your funds only release when milestones are actually met.