Reputation can, depending on your reputation, decide a victory for you without even having to fight.
Reputation is like you said what people think about you.
Character is who you are.
I would, however, never try to build a reputation, because if that reputation ain't who you truly are then you will have to be fake to maintain it and people will see behind the mask at some point.
So you better be smart if you say that you are smart, that will result in a reputation that you can live with.