Companies, including creditors and lenders, have profits and losses every year. They make money from profits and lose money from losses. When a creditor charges-off your account, it's declaring your debt as a loss for the company.
Even though the creditor has acknowledged your debt as a loss in its financial records, you don't get away free. Your creditor will add a negative entry (a charge-off) to your credit report and continue to attempt to collect on the debt.
An account is usually charged off after 180 days, or six months, of less-than-minimum payments. The charge-off will remain on your credit report for seven years from the date it was charged-off. If you pay the debt, it will be updated with a status of "Charged-Off Paid" or "Charged-Off Settled." Either is better than a simple "charge-off" status, but are still undesirable.
The only way to remove a charge-off from your credit report is to wait the seven-year period or negotiate with the creditor to have it removed after you pay the account in full.