You can't, once it starts, that's it. You gotta let it run its course.
I think the best thing you can to is make fun of it. Trying to pick up the pieces as they fall will just make you look desperate, which will make the rumors sound true.
Ignore it, act like you couldn't be bothered to care about such nonsense and if someone asks you about it, make fun of it, they will feel stupid for even thinking it. I dont know the rumor so I cant give you an example but sometimes all you need is a surprised laugh and a 'you shouldn't believe everything you hear' The trick is confidence, people start rumors to get a reaction, and the larger the reaction, the faster it spreads and the longer it stays in circulation.
The very unfortunate thing about rumors travelling through the grapevine is so many people have heard it, you cannot stop it. It doesn't matter how many people you confront about it, or even if you track down the initial rumor-spreader, so many people would have heard it that it would be near impossible to stop it. On the upside, eventually, a new rumor will come around, and people will forget about that old one and start spreading the most recent one. I wouldn't worry about it. Live your life, let thing's play out, and eventually people will get over it!
Sadly, I would say (from personal experience) the best thing you could do is either [a] confront the person who started it and try to reason with them, asking them to tell everyone that it was not true, or [b] (which you may have to do anyway) ignore it, be confident in yourself, and let it all blow over. You may feel uncomfortable, be asked alot of questions, be given strange looks, be rejected, etc. , but it will eventually get better and either go back to normal or even better in some ways, leaving you with experience and knowledge.
laugh it off when people come to you to question it. if you take it seriously people will think it's true. anyway, people will always talk about each other. It can't be helped. All we can do is ignore them and go on enjoying our lives
good advice. things play out eventually