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Found a potential fix ~ have a 4S, and when this annoying thing kept saying I had an unread message, I pulled from the top of screen (notification center) and it ahowed my calendar events, emails AND a text message that looked as though it had not been read. Even though I did read it, I went to that particular text exchange with the sender & looked at it, exited from the text conversation and bam ~ it was gone. The notification center essentially gave me the clues needed to find what message was causing the unread error.

Hope this possibly helps others.
 
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Restart worked

Turned iPhone off/on clearing that pesky red dot saying '1 unread message' (which I hunted for but could never find).
 
Ok, I tried everything that everyone said and it was still there. TRY THIS: first I closed out the app completely, then I went to settings / messages / swipe the top 3 switches to off. Go back to your messages and delete all conversations. The notice went away and I turned those 3 switches back to On. Good as new.
 
My phone was showing 5 unread text messages all day, It was annoying and I refused to sleep until it was gone.

I went to settings> messages> send and receive> uncheck iCloud address>
Press the home key
Go back to your messages
Delete what ever name(s) you think have/had the unread messages in it
The notification should disappear
Hope it helps!
 
My new iPhone 5s (iOS 7) showed 14 unread - there were none! So I went to the very bottom of my texts - the oldest chain of texts on my phone - and began swiping to the left and deleting conversations. After just a couple deleted text threads, the phone restarted on it's own. After that, the incorrect bubble was gone. Woo! Helpful?
 
This just happened to me. Even after rebooting, only apple-to-apple messages were showing up, no standard carrier texts. I eventually cleared it by double clicking the home button and closing messages app completely. Didn't realise it kept the app open when you rebooted but maybe this was part of the glitch. Phew, all messages back now!
 
Problem solved for me

I have had this problem for a few weeks. No kind of app restart or phone restart worked.
My solution was to send myself a text message and then delete the "conversation".
I now have one less ios 7 bug annoying me.
 
Found a GENIUS solution to this problem after MONTHS of looking for the answer. YOU can't isolate unread text messages.... But you can ask SIRI to read them to you! After she does, BAM! No more unread messages- no more annoying notifications :) hope this helps!
 
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