When you say it has become penalized, do you mean that you have lost a ranking that once existed? Or have you never ranked for the term?
In terms of the former, my advice is to always look through all of your backlinks in an excel file (download from as many sources as you can like ahrefs, open site explorer etc) and weed out the bad ones. Firstly contact the site owner to ask them to be removed and if that doesn't work, look towards the disavow tool.