Effect of CO’s & late payments on FICO Mortgage Scores

[Anonymous]

My DW and I are going to be purchasing a new home in March or April of next year. I have been working for some time now on cleaning up my credit and increasing my scores. I have searched around in the forums and haven’t quite found the answer I am looking for on my questions. So here is what I am looking for:

1. MyFICO shows my last late payment as 1yr 10mo ago. This was from an Auto Loan I had with NMAC. I was having some financial issues at the time and had a half dozen late payments over a 12 mo period. This is the 1yr 10mo old since last late. Could I expect a bump in my Mortgage scores when this hits the 2yr mark?

2. I have 5 CO’s from 2016 that are still reporting. All are reporting closed and paid. My question on this part is that 2 of these CO’s were just paid off this year, one in January and one in May. Do the FICO scoring models not consider these “late payments” since they are in a CO status? Obviously, they still have an affect on the scores, but not in the “late payment” category?

I have already talked to my mortgage banker and the CO’s are not an issue for a Mortgage, but I am looking to gain more points on my Mortgage Scores.

Current Mortgage Scores:
EQ: 670
TU: 660
EX: 680

TIA!!

[Anonymous]

In addition, I have about 4 - 6 INQ on each report that will hit 1 yr in October from rate shopping an Auto Loan last year.  Could I expect to see a small bump in score from those becoming unscorable?

[Anonymous]

Bump

[Anonymous]

The answer to your first question is likely "no" that you won't see a Fico score increase when your most recent late payment hits 24 months of age in a few months.  The reason why is that you have more severe negative items on your CR.  If that most recent late payment was your worst severity negative item then you probably would see a gain, but that's not the case.

While COs don't fall into the category of "late payments" they are still negative items.  I'm not sure what the person you were talking to about your mortgage meant by COs aren't an issue.  As far as I know they'll hold back mortgage scores just like any other Fico scores.

[Anonymous]

By not being an issue he means not an issue for securing a mortgage, they are obviously affecting my FICO Mortgage scores. I know the CO’s will have a much longer lasting impact that the late payments.

[Anonymous]

All negative items have about the same length of impact (7 years) outside of a BK, so the COs won't impact your scores longer than the late payments will.  If they're off your report, they don't impact your score.  If they're on your report, they're adversely impacting your Fico scores.