The reputation of a person is developed over time, based on their actions and behaviors which are recorded along with his or her track record.
A person with a bad reputation, such as a known felon or habitual liar, cannot be trusted or considered credible.
Being associated with such a person can also harm one's reputation.
In some cases, even being associated with a guilty person can lead to legal consequences.
For example, someone closely associated with a criminal might be charged with a crime, even if they didn't commit it.
Additionally, aiding a criminal can result in charges of aiding and abetting, which carries penalties.
Therefore, if you do not distance yourself from individuals with bad reputations, you might find yourself associated with criminal activities, and this could lead to serious legal consequences.