There are 3 different credit reporting agencies. Each one gives you a score. They work independent of eachother.
Usually a lender will use the middle of the three scores to qualify a borrower and to chose rate.
There are nonconforming lenders that will use average your scores or even use the highest score. Your mortgage professional's job is to place you with the lender that would be most advantageous to you.
You have three different scores because each bureau has a different system for placing a numerical value on your credit quality. Another reason these scores can vary so much is that some creditors only report to certain bureaus and therefore the other bureaus may not be scoring that particular credit file which can cause a difference in actual scoring.
The information that the credit bureaus have on file about you is provided by the creditors who you currently have credit with, as well as the ones you've dealt with in the past several years.
One creditor may report to only to bureaus A and B, another creditor may report to bureaus B and C, and yet another creditor may only report to bureau B. For this reason, the exact information that each of the credit bureaus has on file about you varies, and therefore so does your score with each bureau.
When disputing incorrect information on your credit report, be sure to write to all three credit repositories. If only one is notified of the erroneous item, your scores from the other two bureaus would not improve.
Mortgage lenders typically look at your middle score as your qualifying score. there are some lenders that will take the high score into consideration as well. But as a general rule when applying for a mortgage always give the mortgage broker your middle score if you know it.
The primary reason for discrepencies in the three different credit scores is that each credit bureau uses a different scoring module. The scoring system used by Experian is the Fair, Issac module, the one used by Trans Union is called Empirica and Equifax uses a scoring system called Beacon.
Credit score differ because of the credit items that are being reported to each credit bureau, all 3 credit repositories are independent of each other, and because their are different credit scoring modules. Some creditors only report to 1 or 2 credit repositories while others may report to all 3. Trans Union is different from Equifax and they are both different from Experian. By all 3 being independent they all have their own individual credit scoring systems. Lastly, just like there are Windows 98, Windows 2000, Windows XP, etc... as operating systems for a computer, there are different versions of credit generation also. Some lenders may use an older credit operating system simply because it is cheaper to obtain credit reports than the latest credit operating sytem out available.