That indicates that faction is your IFF - what is displayed to other players when they click on you. Generally speaking, barring some specific examples, you want your ID to match your IFF.
Best way is, while having the ID equipped, doing /resetrep. There's a 2 week cooldown after doing that and it costs 100k to prevent spamming while say, farming encounters. That will reset your reputation to ID default, which includes having your IFF match your ID.