Charge off is showing in my revolving debt - What is best course?

[Wannamove2012]

My first post so be gentle if I don't do this properly. 

Recent credit report shows one past charged off credit card, Capital One, still reports high balance and past due each month. This is factoring into my current revolving debt (utilization) and greatly effects my FICO score. SOL in my state is 4 yrs, in couple of months it will be 4 yrs, but will remain until 2015. I am looking to obtain a USDA guaranteed home loan mortgage ASAP, my mid score is just under 630. 

My question is should I look to settle so this brings down my utilization and if so would that result in a FICO boost? The simulator shows paying it off will greatly increase my score by as much as 110 points! But it's a charge off not a current credit card, would it be viewed the same? I also want to know how to negotiate to have the least negative impact, I can see it would be probable by trying to do right it will bite me in the keaster. I do know if they post a recent settlement date that can bring my score down, something I obviously don't want. Has anyone delt with Capital One and will they play ball?

[JohnPTEX]

I recently had this same issue when applying for a mortgage although mine was First Premier - I was told that certain credit cards such as Cap One and FP will continue to factor into util because they do not sell the debt but rather maintain a current balance owed at all times - whether this is true or not I do not know, but multiple morgage broekers told me to pay the FP account and it would improve my score - I've paid it but it has not reflected on my credit as of yet

[Wannamove2012]

How long ago did pay? Was it paid in full or a settlement?

[llecs]

IME (for DW), CapOne CCs can factor into your util for years after the charge-off. I recommend paying them off or settling. Then try to GW later.

[JohnPTEX]

I paid FP last Friday but it has not reported as of yet - i was told it would report with their next reporting cycle - I'll post the score change when it does - the account balance is zero but it will show paid settlement for less than full amount / was charged off

[golo]

Iknow ,it sucks,sears/cbna is doing the same to me,ugh.Mine,was "forgiven" and a 1099 was issue in jan 2011 and it still shows on my file as current and it's killin my score,ugh this should be illegal

[Wannamove2012]

It would be helpful to know what score change you get, thanks

[llecs]

What is your overall util including this CC? What would the after utilization be? Be sure to include in any other accounts that could be factored in like other CC COs, and certain LOCs or HELOCs.

How many CCs do you have open or closed with a balance?

[Wannamove2012]

Right now 116% utilization.  I have 2 CC. One with 1,700 limit and charge no more than 70/mo. The other 1,000 charge no more than 70/mo. I pay all but $10.00 4 or 5 days prior to due date. I have a studen loan but I do not believe that is included in utilization. I do not have any other charge offs, credit cards,  or loans factoring into my utilization. So once this is gone it is safe to say no more than 10% utilization.

[llecs]

You might easily see 40-50+ once settled assuming your other CCs report the balances mentioned.