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Reputation is something that one can earn through completing quests, interacting with NPCs, and gaining achievements. Reputation makes one more reputable in certain areas, depending on where and how the reputation was gathered. One's reputation will not apply outside the areas they gained reputation in.
Its main use is to change the attitude of NPCs. Depending on the NPC and amount of reputation, it might make them more confident in the user's abilities. However, there are some that are not affected by high reputation.[1] This resource also acts as a currency in the Reputation Store. If one accumulates 30,000 or more total reputation, they gain access to the store.[2]