If your string is hitting the fretboard, it's because it is too loose.
Are these strings on the "factory settings" ? Did you change yourself your bass strings since you have it?
What type of strings (size) you are using? They might be too big for a standard tuning.
It might also be a bass neck twist problem. If it's not a strings issue, bring it to a shop, they will check it for you.
Also, to get a muted sound on bass, i usually just do like a deadnote on guitar : put you fretboard finger on the note you want to mute, but don't push it towards the fretboard.