Sacking and exterminating a settlement will lower your reputation but does this apply to all religions? Moving into the Holy Lands late in the game means huge cities hard to convert so you are forced to exterminate and sack them in order to control them. I´ve a strong feeling that it does as I seem to remember that everytime I´ve conquered the Holy Lands I´ve had a bad reputation. It´s a pity that your rep is only global, it should have been divided into religions too thus making you able to keep a good rep with factions of your own faith while fighting the heretics/ infidels.