I have checked my credit rating online and is down under a default indeed, says I have paid but still says it could effect me up to six years, I should contact O2 as opposed to lowell?

A few years ago I had an issue with an O2 contract, cancelling the contract over the phone I was told I would have no other payments to be made and clerified with them before ending the call. Behold a few months, after I am receiving a charge of £40, money I could have paid instantly but refused to for the only reason being I was immature and didn't want to pay after cancelling when they told me I wouldn't have to pay anything else. The debt was passed on to lowell and for roughly 8 months they continued to send me absurd mail, at times even offering me the option of halving the debt after claims of turning up at my house. I knew this was a load of nonsense but it adventually paid off as I got so bored of receiving mail from them I just paid the full 40 to end frustration. A resulting cost is my credit rating has suffered drastically resulting to a silly £40 as I have an account now listed as defaulted? I am awful at sorting stuff like this and just want to know what I can do to sort this issue. Ideally I could have paid the £40 straight away as it is such a small amount and not worth years of bad credit, but it was principal I refused to part with the money..