I have to deal with this on a daily bases. The best way I have found is to put the right information out there with the facts to back it up. People will eventually put two and two together and figure out that the rumor is untrue.
I have also found that this turns the table on the person who started the rumor and their character is ruined while yours stay intact or even improves because of how you handled the situation.
Well..unfortunately there's nothing you can do about it except to keep your head up and go about your business. If someone approaches you with a question, just say "you believe everything you hear?" and say no more and keep going. But most importantly, KEEP YOUR HEAD UP!!!! It will all die down sooner than you think. Since you know that whatever is said isn't true - don't worry about it, trust me.
Rumors are painful. When you're the brunt of a nasty tale, just going to school or work can be traumatizing. You see acquaintances whispering in the corner, glancing your way; friends refuse to look you in the eye, and all because of a nasty rumor. You can't undo what is already done, but you can take steps to stop the gossip.
Step1
Pinpoint the source and confront her. A person who gossips depends on secrecy to carry out her little plan. If you know she is the one who started trashing you, confront her and calmly ask for an explanation of her behavior. Then request that she stop immediately.
Step2
Wait it out. Unfortunately, sometimes you can't figure out who started it, and it's spreading like wildfire, burning everything in its path. Even though it's painful now, it will pass in time if you don't feed the flames.
Step3
Conduct yourself in a manner that proves the rumor wrong. If the gossip mill is saying that you are promiscuous, date only one person for awhile. If they claim you cheated on your test, ask the teacher to move you to the front of the classroom and make it a point to keep your eyes only on your papers.
Step4
Laugh along with the crowd if the rumor is embarrassing but won't cause any real damage. Diffuse the sting by showing amusement. If they can't get you upset, the fun of spreading gossip won't last long
laugh and say how dumb is that? dont put more time into explaining why it isnt true, the more you try to convince someone that its nonsense, the more they will not believe you. just laugh and walk away.
Those who really know you, and know that a person such as yourself with a fine character, would not be guilty of whatever it is that's been said about you. If you haven't done anything wrong, then you have nothing to feel guilty about, so just ignore the trouble maker that started the rumor, and as for your friends, if they stick by you, and know you're an honest person, you have nothing to worry about. Eventually, the truth wins out over lies. Good luck!