What that means is that if you've been convicted of something you should point that out. If it's serious, like assault, you're out. If it's not serious, like exceeding the speed limit, and you didn't mention it, you're out.
Current circumstances are about trying to uncover anything that might be used as leverage against you. So having excessive debt means you're out. Being gay is absolutely ok, but keeping it a secret from your parents is not.
All techniques, from completing the application form to polygraph and interviews are about finding the chinks.