Reputation without been banned or unfair play

You are the only one who can fix your rep. Information on how the rep system works and how to improve your rep can be found here - http://enforcement.xbox.com/home/howto#sub-topic0-0

Reputation has nothing to do with Enforcement suspensions or bans.

You can "fix" your reputation yourself, by having your friends invite you to their game session, and play online.

The more you play with people that don't mute your microphone, or report you for something that's not a violoation of the Terms of Use, but still regarded as "unfair" behavior in games (e.g. intentionally driving in the wrong direction in a racing game,
griefing, etc.), your Reputation will go up again.

Until then, you can only play with other "Needs Work" people.

Being reported doesn't affect your reputation, is only when you at found to have broken the code of conduct your reputation will decrease.

Actually that's not entirely true. If you're found to violate the code of conduct you can receive a suspension/ban. Rep has nothing to do with suspensions/bans.

I’ve never been suspended. Why do I have such a low reputation?

A change in an account’s reputation score is not considered an enforcement action and is not indicative of a suspension;
it’s possible to have a low reputation score without violating the Microsoft Services Agreement or Code of Conduct. Instead, reputation reflects how the Xbox Live community views a player’s behavior over time.
The reputation system emphasizes a player’s sportsmanship and overall attitude and is intended to help ensure a level playing field for all Xbox Live members.

I am having the same issue. My reputation has dramatically decreased overnight and now I cannot play games online. The other point is the fact that I had been in party chat rather than in game chat and did to do anything to earn this deduction in reputation.
This issue needs to be resolved. I have not been banned but simply have the "Avoid me" reputation banned under my Gamertag.

The reputation system is based on your interaction with other players and reflects the way the Xbox Live community views a player’s behavior over time. The reputation system emphasizes a player’s sportsmanship and overall attitude and is intended to help
ensure a level playing field for all Xbox Live members. As such a change in an account’s reputation score is not considered an enforcement action and is not indicative of a suspension; it’s possible to have a low reputation score without violating the Microsoft
Services Agreement or Code of Conduct. For more info:

enforcement.xbox.com/.../howto

To improve your reputation avoid activity that other players are likely to view as unfair or unsportsmanlike and play a wide range of games and gametypes. By playing different games and interacting with other players in a positive and productive way, your
reputation score can improve.

Enjoy gaming and stay on the safe side!