Q. I have a charge-off on my credit report. Should I pay it in full or pay a settle-up amount. If I pay a settle-up amount, how long until I can get a mortgage loan? Once a charge-off hits your credit report, it will stay there for seven years.

If you repay all or part of that debt, your creditor will update the charge-off to "paid in full" or "paid as agreed." But it will not fall off your credit report any sooner.

Nor will paying part or all of the debt change the impact that charge-off has on your credit score, according to the folks at Fair Isaac Corp., the creator of the widely used FICO credit score.

Despite that, there's a good reason to negotiate a partial repayment.

When potential lenders see that on your credit history, they'll know that you made an effort to be financially responsible. That will count in your favor the next time you apply for a car loan, credit card or mortgage. The newer the charge-off, the more important it is, because that black mark is going to remain on your credit report for many years to come.

Unlike with foreclosures and bankruptcies, there are no hard-and-fast rules regarding how many years you have to wait until you get a mortgage after a charge-off is recorded.

Whatever you do about your charge-off, following our "7 smart moves to improve your credit score" will help rebuild your financial reputation. And if you make all of your payments on time for two years and have a credit score close to 700, you should be able to get a mortgage at a good rate.

Lenders have clamped down on lending standards in the wake of the housing market problems caused by issuing mortgages to people who couldn't pay. But with a recent clean payment history and a paid charge-off, you shouldn't have a problem.