How does paying off a charge off affect your credit?

Usually, once a company charges off a debt, they will send the unsavory transaction to the credit bureaus, lowering one's credit score.

Even if that individual pays the charge-off, the damage is done insomuch as the lender rarely sends an updated message indicating that the debt was paid.

If you paid the charge-off, you may dispute the transaction line (by having a note added to the line that states that the debt was paid on a particular date), however, you DID allow the debt to get charged off, so that line will only go away after seven (7) years.