You have the option of becoming a criminal in Mount and Blade II: Bannerlord. If you do so, it means you’ll make an enemy of some of the factions in the game. This route could prevent you from entering certain towns and castles, and make navigating the world a little more difficult. However, it could make it easier to work with other factions who are against them, and it could prove a lucrative lifestyle if you’re cunning enough.
For those looking for the criminal rating, you can find it at the top of the town page where you have the criminal status. You should be able to see your status. If you attempt to approach a town or castle to enter it, you will have the option to negotiate your surrender. By doing so, you can choose to give them the required money for the crime you committed or a pound of flesh, which is them lowering your health points to one. Mostly, you need to wander around to do other things so it naturally goes away. After a little bit of time, your status as a regarded criminal should go away, granted you don’t do anything else to increase it.
Criminal status and not having a good reputation with a faction, or people of a faction, work a bit differently. For example, if you have a criminal status you’re barred from entering castles or the larger settlements in the game, but they won’t hunt you down. If you have a negative reputation with a faction, their wandering caravans and armies will hunt you down and attempt to attack you. You have the option of fighting them, surrendering, or trying to negotiate your freedom from the situation. You know have a bad reputation with a faction if you see their nametags as red when wandering through their territory or near their towns.
If you have a bad reputation with someone, attempt to avoid their faction for a time and wander out of their area. For those attempting to lower your criminal status, most of the time, it went away after a few in-game days, especially for those who did it for a mission, such as fencing goods out of a city.