A fungal nail infection starts to develop when fungus starts attacking the toenail, fingernail, or the nail bed. Fungi can attack the nails through tiny cuts within the skin or through the openings between the nail bed and nail. If you have a healthy body, the infection will not cause any serious problems. However, it may hurt, look bad, or damage your nail bed. A nail infection may lead to serious health problems if you have a weak immune system or suffer from diabetes.