About 5% of accusations against teachers are found to be true
Teachers should have the right to appeal against unfounded allegations appearing on their Criminal Records Bureau (CRB) checks, MPs were told.
Teacher support groups and unions told the Commons schools select committee that records of unproven claims brought against teachers' could blight careers.
MPs were told how teachers often felt they were presumed guilty until they could prove themselves innocent.
They were also increasingly fearful that pupils would make false claims.
Michael Barnes, national secretary for Falsely Accused Carers and Teachers (Fact) said, following the Soham murders, more information was now disclosed on CRB checks.
"Issues that previously wouldn't have appeared on an enhanced CRB now routinely do appear because of the Huntley situation at Soham," he told the cross-party committee of MPs.
"There needs to be some sort of appeals process against information that is put on the CRB, because, at the present time, it is entirely a matter for the chief constable."
Amanda Brown, head of Employment, Conditions and Rights at the National Union of Teachers said teachers often did not know that details of a previous minor incident, where no blame was found, were on their records until they applied for a new job.
She told MPs: "We have absolutely no objection to employers seeing convictions, what we have a real objection to is the soft, unproven, malicious - potentially - allegation which have been made... being disclosed."
Paul Kaufman, partner at law firm Wiseman Lee LLP, said teachers who applied for a new job several years after an allegation was made could have difficultly in exonerating themselves to a new employer, because solicitors files can be destroyed after seven years and court transcripts may also be destroyed.
Chris Keates, general secretary of the NASUWT, told the committee of MPs: "What is important is how that information is recorded, how it is used, when it is passed on and when it is not and who makes those decisions.
"If you have this on your enhanced CRB check, people are not going to take the risk of employing you - you still have your career blighted."
Julian Stanley, chief executive of the Teacher Support Network, said accused teachers needed greater consistency in what was being recorded.
"They want to know what's going to be on their records and they want to have some sort of input into that process if they've been found to be innocent because that's critical for their future careers."
Ms Keates said there was currently no consistency in the procedures in dealing with allegations made against staff.
"We need a fair, open and transparent system," she told the select committee.
"We are dealing with a complex issue here - for some it's a cry for help... for others it's a calculated move to undermine a given teacher."
Ms Keates said false allegations were an ongoing problem for her members, with only about 5% of complaints found to be true.
"Graduates are worried about it if they are considering entering the profession," she told the committee.
"It's something that crops up now quite frequently."
Ms Brown from the NUT added: "It's the chilling effect for all teachers... There's a real difficulty in knowing the scale of the problem."
She said very few allegations were of a sexual nature - the majority were to do with physical restraint and discipline issues and most were directed against male members of staff.
"The situation becomes more complex when parents go direct to the police - it raises the game."
Mr Kaufman said: "Teachers certainly feel they have been found guilty before the case has been heard by the way they have been treated, by the way they have been suspended, arrested, fingerprinted and have their DNA taken.
"The whole approach presumes that they are guilty and they have to prove they are innocent."
The select committee hearing also discussed the "corrosive effect" of suspensions on accused teachers.
Ms Keates said: "Suspension is a neutral act in law, but it's not viewed like that by anyone who knows someone who's been suspended or by the person who's been suspended."
The longer the suspension, she added, the worse the situation becomes.
Ms Brown said the impact of suspensions on teachers' mental health was severe, with many told they should have no contact with anyone from the school.
Mr Stanley from the Teacher Support Network said it should be possible for suspended teachers or head teachers to carry out other types of work, for example, for the local education authority.
"They are still professionals who may well be returning to work, " he told MPs.
The Home Office said the CRB provides information to employers so they can make more informed recruitment decisions based on suitability for the job.
A spokesman said: "This information has proved to be extremely accurate at over 99.98%.
"Non-conviction information released on a disclosure is at the discretion of a chief police officer and released only if they consider that the information is relevant and proportionate to the position being applied for."
A spokeswoman for the Department for Children, Schools and Families said: "Obviously the safety and well being of children and young people is absolutely paramount and we have the toughest ever procedures in place to protect young people. But false or misleading accusations against teachers or other staff are completely unacceptable.
"They run the risk of discrediting hard working and committed teachers and support staff who work tirelessly to improve the lives of young people. False allegations also risk undermining genuine allegations.
"We have published the findings of the review of implementation of guidance on handling allegations of abuse made against those who work with children and young people.
"This outlined that we intend to amend guidance to say that allegations which have proven to be untrue do not need to be disclosed in teachers' references."