Directory links are probably the easiest and most affordable way to promote your website on other sites. There is even something called link exchange where you can exchange website links with other sites for free. However, not all links are equal, which is why it is important to do your research before you exchange or purchase a link.
It is also true that if your website has a pattern of bad links, it may have a negative impact on your SEO rankings. This will almost certainly affect your business, so you must be thorough when checking links.
What do you look for? A good link will always be coded correctly and may even include link text. But directories often prohibit the use of anything other than the specific site name. So, if you post a link with link text it may be removed or it maybe no followed which is a tag applied to the link to stop it passing juice.
What about bad links? These are gained when the directories are found and deindexed by Google who prohibit these domains as generally there only propose is to sell links. These are very often then impossible to remove and your site will start to carry dead weight from all these bad links.
You should avoid these links at all costs because they will not improve your SEO ranking either.