Articulate1,
While in some rare cases, a score can go down after negative information is removed, it doesn't happen all the frequently. This can happen because the weight the FICO scoring formula applies to certain items is dependent on other factors within the report, such as length of credit history, size of the credit file, the presence/absence of late payments, and others. For example, the effect of a max'd out credit card account will vary up or down depending on whether or not there are any accounts with seriously late payments on the report. So, in this example, and again only in rare occasions as there are other factors at play here, you could possibly get more points for that max'd out credit card WITH the charge off than without the charge off. Again, this is rare, but you asked....
And to answer your question about "When the account is paid how could it be a charge off?", the debt is "charged off" as a loss after going delinquent a certain number of months. Then if it gets paid AFTER being charged off, it's indicated as a "paid charge off."
Barry