Freelancer uses a system consisting of a reputation sheet showing your standing with the many factions of Sirius; you can view this by pressing F8 while playing, or clicking on the appropriate icon in the upper-right corner of the screen in-game. This goes on a scale of red to green, red being hostile and green being friendly. Between these two extremes are factions shown in white, depicting groups that are neutral to you. Some factions, such as the Zoners, are neutral to the majority of the lawful and unlawful factions in the game.
How to change your reputation
You reputation is set by the faction that "likes you most". The faction that is flashing yellow or is at the most green will usually be the faction that gives you their "tag". If your tag is one from the flashing yellow, then that tag will not go away until you gain neutral (white). At that time the highest green faction will give you a tag.
When you create a new character on the Discovery Freelancer RP 24/7 server, you start in good standing with the LPI and most of Liberty's lawful factions. If you want to increase your reputation with one of those factions, the best way is to either complete missions given by that faction in the bar of the base on which you are docked, you can buy a bribe there, or you could destroy ships or storage depots from factions hostile to the one you want to be a part of. If you want to change factions completely, such as going from lawful to criminal, then first you need to achieve at least a neutral standing with them; this is best achieved by completing missions from their allies if you're neutral with any, bribes on certain bases, or killing their enemies. Becoming friendlier with a faction will lower your reputation with their enemies no matter what.
Important Note: If you are a part of one faction, you should get their ID and their tag before level 40 as you may not use the Civilian ID after level 40. Also, your reputation sheet should match the faction's diplomacy as closely as possible, which means to be allies of their allies, and to be enemies with their enemies. Sometimes, this isn't possible to achieve; in that case, if you're near their enemies, you should shoot them a bit so that they consider you hostile for the time you're in the area.
Factions shown in red on your reputation sheet are enemies, and NPCs (non-player characters) of these factions will treat you as such if they see you: they will shoot at you and attempt to destroy you. Depending on the faction you choose to be a part of, other groups should consider you to be hostile or friendly once you gain a sufficiently high standing with that faction.
Important Note: Players cannot use the same mentality that NPCs do. If you see another player and they show red in your HUD, you cannot simply start shooting them. You must do some RP before attacking, and as a general rule, a simple "Engaging hostile" is not enough.
Factions shown in white on your reputation sheet are neutral, and NPCs (non-player characters) of these factions will in most cases simply ignore you if they see you. They won't bother you unless you bother them, as a general rule. Some factions, such as the Zoners, are neutral to most factions; although it shouldn't reduce your reputation with your chosen faction to shoot them down, it isn't recommended to get enemies for nothing. Depending on the faction you choose to be a part of, other groups should consider you to be hostile or friendly once you gain a sufficiently high standing with your desired faction.
Factions shown in green on your reputation sheet are allies, and NPCs (non-player characters) of these factions will treat you as such if they see you: they won't shoot you unless you shoot them first. Depending on the faction you choose to be a part of, other groups should consider you to be hostile or friendly once you gain a sufficiently high standing with that faction.
IFF stands for "Identification Friend or Foe".
Upon reaching a certain reputation level with a faction, it will start flashing on your rep sheet and you will be given an IFF (also called Tag; not to be confused with Player Faction Tag). IFFs are used to identify a character's primary faction association, but can also represent the independent Freelancer occupation. You can either have one or no IFF; having more than one is technically impossible.
To change your IFF, bring the flashing reputation down to neutral (white) by using the "/droprep" command, which costs a small sum of credits and lowers your flashing reputation to white. You may also lose your IFF by falling in disfavor with the NPC faction your IFF belongs to by shooting and destroying their ships and depots.