No, they do not diminish in terms of impact every month. Perhaps not even every year. The breakpoints are not well known on the aging of negative items.
As a general guideline though, I like to say that a minor negative (like a 30 day late) usually sees about 2/3 of the points lost come back in about 2 years time, with the final 1/3 of the points lost returning once it's gone at ~7 years. Conversely, a major negative (like your CO) may see about 1/3 of the points return in about 2 years time, where the final 2/3 of the points lost wouldn't return until the baddie is gone.
The above estimate that I gave assumes the presence of only one piece of negative information though. Once you're talking multiples, that's a different conversation and trying to determine the impact of any one negative is much more difficult.
