What is the psychological term for disregarding correct but unwanted information?
Belief perseverance is "the tendency to cling to one's initial belief even after receiving  new  information that  contradicts or dis-confirms  the basis of that belief" (Anderson, 2007).

Belief perseverance is usually regarded as a special case of the confirmation bias. (Also see these earlier questions.)

References

Anderson, C.A. (2007). Belief perseverance (pp. 109-110). In R. F. Baumeister &amp; K. D. Vohs (Eds.), Encyclopedia of Social Psychology. Thousand Oaks, CA: Sage.