If a loan is declined due to credit issues among three borrowers, which score is used?

When determining which credit score to use among multiple borrowers, the practice in the mortgage industry typically involves selecting the middle score from the three credit scores. This means that from the lowest, middle, and highest scores reported, the middle score is deemed to reflect the borrowers' creditworthiness more accurately.

Utilizing the highest score may not represent the overall credit risk accurately if one borrower has a substantially better score, and the lowest score could unfairly disadvantage higher-scoring borrowers. The average of the three scores isn't standard practice for most lenders either, as it could dilute the representation of individual credit profiles. Therefore, the emphasis on using the lowest of the middle scores aligns with a conservative approach in decision-making regarding credit risk among borrowers in a joint loan application. This ensures that the borrower with the weaker credit history does not negatively impact the overall assessment excessively while still considering the credit strength of the others involved.