Credit scores are very important in the mortgage industry. It is a factor in determining your interest rate. Most people have three scores from the credit agencies; Experian, Equifax, and Transunion. For people with limited credit, they would have one or two or even no scores.
Most lenders will usually take the middle of the three scores. If there are two borrowers, then the lenders use the lowest of the two middle scores.
For example, there are two borrowers and their scores are as follows:
Borrower 1: 750, 701, 685
Borrower 2: 678, 643, 601
The middle score for borrower 1 would be 701 and the middle score for borrower 2 would be 643.
The lowest of the middle scores would be 643.
However, some lenders will take the average of the scores instead of the middle or the lowest of the middle scores. To take the average, you take add all the scores and then divide by the number of scores.
In the example above, the average score for borrower 1 would be 712 ((750+701+685)/3). For borrower 2, the average score is 640 ((678+643+601)/3).
The average of both scores is 676 ((712+640)/2). Another way is to sum up all the scores and then divide by 6.
The credit scores of 643 versus 676 isnt that great but to the lender it makes a huge difference. It can be a matter of getting an excellent rate or a mediocre one.