If your dishcloth only recently been in use, it can still sometimes go stale smell. If you wait 3 minutes at 900 watts in the microwave the smell is gone.
Place the damp dishcloth in a microwave oven and let the microwave 1 minute running at maximum speed. Kills the bacteria and chased away the bad odors.
Wash dishcloths every time you use your dishwasher by putting them in a corner in the machine.