Obtain local references from the contractor, and call them to check if they were satisfied with the work. Ask questions. Did the contractor keep to the schedule set forth in the contract? Were there unexpected costs? Did the contractor clean up after finishing the job? Were there any problems? Was the contractor responsive to your concerns? Would you hire the contractor again?
In addition to speaking with references, ask them if you can stop by and see the work for yourself.
Try to get references on jobs that are still in progress and completed jobs.
Ask the contractor for a list of material suppliers and subcontractors and contact them to find out if the contractor pays their bills on time.