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In Fallout, Fallout 2 and Fallout Tactics: Brotherhood of Steel, armor helps the player by increasing their Armor Class, Damage Threshold and Damage Resistance. Different kinds of armor are better against different types of Damage.
In Fallout 3 and Fallout: Brotherhood of Steel, there is only Damage Resistance and all kinds of armor are equally resistant to all types of damage, with the exception of a few, such as the Enclave Hellfire armor which increases fire resistance.
Most armor and clothing can affect abilities such as science and repair, more advanced types of armor, like the Power Armor, also increase your Strength and other S.P.E.C.I.A.L abilities.
Heavier armor weighs a lot more than normal clothes, so make sure that you have plenty of spare room to accommodate its weight. Heavier armor will usually slow you down, where lighter armor will not affect your agility. Heavy armor will make you louder and decrease your chances of successfully sneaking.