Before you decide whether or not you want to terminate your lease without paying the early termination penalty demanded by your landlord, you should consult with an attorney who can advise you of your state's laws relating to the termination of leases. Most states allow tenants to terminate leases for limited reasons, such as if the apartment is unsafe or unhealthy. However, the issues you mention in your question (the air conditioner and dishwasher not working, and the neighbors being loud) may not be legally sufficient to terminate your lease without penalty. Again, I encourage you to discuss the situation with an attorney to determine if you can safely terminate your lease without the risk of liability.
While early termination of your lease could lower your credit score, it should not damage your credit rating to the same degree as a foreclosure on a home. However, if you terminate your lease, you landlord could sue you for the full balance owed on the remaining lease. If the landlord obtains a judgment against you, they may be able to garnish you wages, levy your bank account, or even place a lien on your new property, depending on the laws of your state. In addition, a judgment would appear on your credit report, and could cause even more damage to your credit rating.
If you find that the complaints you have mentioned are not sufficient to terminate your lease, you may want to pay the penalty to allow you to leave the apartment without worrying about further repercussions, such as a lawsuit or credit problems. You may find that paying the penalty is well worth the amount of trouble it will save you with your landlord. Again, you should discuss this with your attorney to determine the best course of action for your particular situation.
If you would like to learn more about credit reporting, I encourage you the visit the Bills.com Credit Information page. To read about Tenant's Rights law in your state, you can also visit the U.S. Department of Housing and Urban Development website.
I wish you the best of luck in resolving this situation, and hope that the information I have provided helps you Find. Learn. Save.