Virgin media ruined my credit report

Hello. Any advice appreciated please. Virgin media have basically completely screwed me.

I took out a package with them where I was supposed to receive a SIM card and tv services. They never sent the SIM card. I paid for the service for over a year. Called them about the SIM card not being received multiple times. They still did not send it. After a year I decided to cancel my services with them and move over to sky. They then sent a final invoice to say I owed them £260. Since I did not receive the SIM card for over a year I disputed this payment as the SIM card services had been paid for and never received despite chasing them for it.
They told me over the phone that I would be refunded for this. I never was. 6 months down the line I received a debt collector letter asking for payment for the final invoice. Tried to call virgin media to explain the situation but got no where with them.

As I am buying a house currently I decided to make payment for the final invoice as I needed a default removed from my credit report. I should not have had to make the payment but I was getting no where with them and made it to save myself from bad credit assuming the default would then be removed. This is what I was told during one conversation with them. Made payment. Now it says default settled. I was told the default would be removed. This is causing so much stress because I am now going to lose a property I am trying to purchase. I had an immaculate credit report before this and now I’m being told I cannot buy anything on finance because of this. Really need help with what to do. I have emailed them but get no where with them.