possible employers doing complete background checks

[ARK1]

I live in Indiana and am currently unemployed.I have been seeking work in Il and IN.I was under the impression that it is illegal for prospective employers to ask a persons birthdate or any type of personal information,such as prison records,court records,driving records,credit records,etc.Im finding that most employers,even temp agencies are now doing complete background checks on prospective employees,can they legally do this?how did it come about that they can do these background checks?If an employer cant ask you those types of questions on a application,how can they do it otherwise?Thanks,I hope you can help.