It means you've been a bad boy. If your rep drops below 6, you lose all your paladin abilities and there's no way to get them back. Viconia joining your group will automatically cause your rep to go down by 2 points. Killing innocent people, being selfish and stealing also cause your rep to decrease. If as a paladin you started with 12 points, it means you've lost at least 7 points from various nefarious acts.
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