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She was a prostitute. She worked in a house of ill-repute.
ill repute = bad reputation
'Of ill repute' refers to a bad reputation, and yes, absolutely it can be harmful, regardless of the truth.
Ill-repute refers to having a bad or negative reputation. It means that someone or something is generally viewed in a negative light by others.
Antonyms for reputation:disreputableness, ill repute, notoriety
A person of ill repute has a bad reputation.