I think you have 3 separate issues here.
There are some near-universal assumptions that people make about others who exhibit poor hygiene. Hygienic, tidy appearance is separate completely from style. You can wear the exact same outfit, but still give different impressions about yourself based on how tidy you are.
I believe it's important to encourage personal grooming, and to emphasize that personal hygiene is separate from looks, even though it affects how you look.
Good personal hygiene consists of:
- Bathing regularly
- Washing hair regularly
- Brushing/combing hair before going out in public
- Brushing teeth regularly
- Wearing clean clothes in public
- Wearing properly-fitting clothes in public
- Trimming fingernails regularly
- Getting regular haircuts
- Using deodorant
- Maintaining facial hair
Some of this does vary by culture, with more or less being expected.
While no one really likes having their character judged based on their appearance, there may be a valid reason we judge people on their cleanliness. Dirty appearances and smells are associated with poor health, and poor health can be contagious.
Your child should learn how to care for their own personal hygiene. There are very few places where it's generally accepted that you don't have to be groomed to be there. Namely: home, a close friend/family member's home, and WalMart.
I believe that clothing we choose to wear is part of our self-identity. Considering how much we're judged on our appearance, I don't think my opinion is amiss.
Regardless of whether or not we feel that people should judge on appearances, it happens and it's always going to happen. So, it's best to be prepared for that. This means that it is important to be aware of how we're representing our identity to others.
If you just wear whatever is comfortable, no matter how it looks, that's your prerogative. However, the identity you're projecting is, "I just wear whatever is comfortable, regardless of circumstance/expectations". Some people may also consider this appearance to not be tidy, and so you're back to judgments about tidiness.
If you wear a style of clothing that is representative of a subculture, then you're projecting the identity of, "I belong to [this] group." With this, you end up also opening yourself up to judgments and misconceptions attributes to that entire group.
If you wear clothes you feel truly represent yourself, then you're projecting your identity, rather than a blanket identity attributed to many.
I would encourage your child to wear the types of clothing that are age-appropriate and conform with their own identity.
Building self-confidence in personal appearance
If your child knows that they are well-groomed, then they can also know that judgments are being made about their appearance because of cleanliness. This improves confidence by removing from the table a range of attributes or judgments that may lower confidence.
If your child is wearing clothing they feel represents their identity, then you can support them in that. Try to learn about that style (probably by observation), and facilitate it if you can. This may mean suggesting articles of clothing your child already owns that may "work" better in an outfit choice that is not working. It may mean letting your child have more power in deciding which clothing to buy.
When trying to increase your child's self confidence in their appearance by making verbal statements, wording can be important. Here are some examples:
"I can tell you put a lot of effort into that outfit today."
"You look very well put-together."
"That [accessory] is a nice touch."
"You did a great job picking that outfit, it looks amazing."
All of these statements compliment your child's ability to maintain their style. These statements/compliments are not about things your child can't change, such as their physical appearance (or current wardrobe, unless they have their own money). They can change how much effort they put into their appearance, whether or not they look tidy, and what sorts of choices they make about outfits.
You may notice that you don't necessarily have to like a child's outfit in order to compliment them about their ability any more than you have to like an artist's subject matter to compliment their technical ability. However, your tone should not say, "I don't like the outfit, so I'm complimenting the only thing I can think of." These statements should be genuine.
If your child happens to get teased based on an outfit choice, you can use that as an opportunity to build confidence, with statements like:
"You should be proud of yourself for not letting [Person] change how you express yourself."
"You're very good at understanding that they weren't teasing you because of your clothes, but because they wanted to tease you about anything." (Supposing that they are good at understanding that. If your child isn't, that's something else to work on)