Retro Fitness review: cancellation

I followed their cancellation policy, I sent them a registered letter cancelling my membership. They acknowledged they received the letter. They then told me that I owe them money for cancelling. I had a year membership, which I did not want renewed. They hounded me for the money and said they wanted me to stay. The reason for quitting the gym is because it was always over crowed when I went and the machines had a waiting line to use them. They have now damaged my credit score. I need help, How can I resolve this?