Would it be better to have a 3 year old charge off reported 'settled for less than full amount' or wait until you can pay the full balance?

It depends on when the account was last reported on the bureaus and other current action. Is this account being actively collected? If so, is that action particularly stressful to you? Any issues of stress levels, aggravation and conscience would have to be considered. If the account has a last reporting date within the past 12 months, it is having the largest impact on your credit scores. If it is not being updated to within that time, you need to be aware that paying or settling MAY cause the status to be changed as of today's date (month/year). The best course of action is always to negotiate with the collector or credit grantor to remove the account from your credit report completely in exchange for payment, or settlement. That way you stop all further collection, pay your debt and clean up your credit.