WikiCoins:Grading Coins

First, the basics. Here are the coin grades from lowest to highest:
 * Poor
 * Fair (FR)
 * About Good (AG)
 * Good (G)
 * Very Good (VG)
 * Fine (F)
 * Very Fine (VF)
 * Extra Fine (XF or EF)
 * About Uncirculated (AU)
 * Uncirculated (UNC or MS-xx)
 * Proof

For further clarification, “Proof” is not technically a grade – it’s essentially an Uncirculated coin for wear, but Proof coins have bolder strikes and a special mirror-like finish. For even further clarification, the “MS” (in connection to Uncirculated coins) stands for “Mint State”, while the “xx” stands for a numeral designation. More on that a little later.

How important is “grade” or “condition” when it comes to coin collecting? Important enough to spark off many a heated debate (and even lawsuits) between buyers and sellers, between fellow collectors, and between grading companies. Why? Because a coin’s value is directly tied to its grade. The higher the grade, the higher the market value. The difference from one grade to the next highest grade can oftentimes mean the difference of hundreds of dollars! That’s why an oft-repeated coin collecting true-ism states, “Buy the best grade you can afford!”

Originality and Eye Appeal
Let’s say you need a 1909-S Indian Head Cent for your collection. By a stroke of luck, a dealer has two of them for you to consider. One of the 1909-S cents grades XF, while the other grades UNC. They both cost roughly the same. Neither coin has a hole, rim damage or surface nicks. Which one should you purchase? Sound like a no-brainer? Clearly, you purchase the Uncirculated 1909-S, right?

Wrong!

In this case, you probably want to purchase the 1909-S that grades XF! Ok, I cheated– I didn’t give you all the information. What I didn’t tell you is that the XF 1909-S cent had obtained a natural, attractive red-brown patina over the years. The UNC 1909-S cent was a sparkling bright orange, but this color was NOT natural, as the coin had clearly been cleaned. Not only that, the cleaning job was less than stellar, as light abrasive marks from the cleaning were visible. What does this scenario tell us? It tells us that while both coins were technically the correct grade, a coin’s GRADE is only the first major step in EVALUATING a coin’s desirability.

In the above scenario, both coins were high-grade coins, though the UNC 1909-S cent was of the more desirable grade. But that’s the only advantage the UNC 1909-s cent had over the XF example. The XF cent had two huge things going for it. The first: it was original. It had never been cleaned, dipped or altered in any way. The red-brown toning developed naturally. So commit this to memory: numismatists LOVE “original.” They’ll pay more for “original” than they will for “cleaned”, “dipped,” or enhanced in any way.

Secondly, the XF 1909-S had EYE APPEAL going for it. Now this can be tricky– remember the old saying, “Beauty is in the eye of the beholder?” Well, that can hold true in coin collecting as well. In fact, many collectors might well prefer the sparkling bright orange UNC 1909-S cent over the more subdued red-brown XF 1909-S cent. But those that do will probably not be seasoned collectors. Dealers and advanced collectors will almost always see more beauty in the natural-toned XF cent than the un-natural looking cleaned UNC cent.

But “eye appeal” is not only debatable when evaluating cleaned vs. natural coins. For instance, two UNC. 19th century U.S. silver dollars can both be original and uncleaned coins. But while one survived its 100+ years as a lustery, bright-white coin, the other obtained an even, deep-purple tone. A good many expert silver dollar enthusiasts much prefer the deep-purple UNC silver dollar over the blazing-white dollar— in fact, many a silver dollar collector will pay big premiums for a mint-state silver dollar with an attractive purple, or even rainbow-colored, toning. At the same time, there are many expert silver dollar collectors who consider “toned” silver dollars to be “tarnished” silver dollars. So this is a case where beauty truly is, “in the eye of the beholder.”

Grading Terms
But it all starts with grading. In the opening of this article, I listed the basic grades. But what is a “Good” coin? What is a “Fine” coin? Well, let’s try to break them down in laymen’s terms.


 * POOR - a coin that can barely be identified. Virtually worn smooth. But personally speaking, this grade is WAY too generalized.  A worn coin that can only be identified with a magnifying glass and bright lights is a “Poor” coin.  But a coin that can be easily identified at a glance can ALSO be graded “Poor.”  Such a coin is always ridiculously worn, but in my experience, a pretty wide range of wear falls under the category of “Poor.”


 * FAIR - most of the design and legends are worn away, but enough is visible to pretty easily identify it as to type. Date is only partially visible, if at all.


 * ABOUT GOOD - perhaps 60-70% of the design is visible, but still quite worn and shadowy. Perhaps a readable date, or at least a partial date.


 * GOOD - design-wise, legend-wise, date-wise the basics are there. Everything is still pretty worn and flattened. No intricate detail visible.


 * VERY GOOD - a coin that has seen a good deal of circulation, but now is nice enough to be what I call, a “no eye-strain” coin: design, legends, date easy to see, but not detailed.


 * FINE - now we are starting to see a bit of detail, but still a good amount of wear on the high spots of the design


 * VERY FINE - a circulated coin, but a coin with most of the finer detail visible


 * EXTRA FINE - a coin that circulated very little. MOST of the intricate detail is visible


 * ABOUT UNCIRCULATED - perhaps a hint of the original mint luster. Maybe circulated just enough to appear mint state, but a little dulled or dirty


 * UNCIRCULATED - Mint State! But here is where it gets a little tricky.  All mint-states are not created equal.  In fact there are eleven categories of “mint state” going from 60 to 70! MS-60 is an uncirculated coin with some bag or contact marks, while an MS-70 coin is FLAWLESS!  MS-70 coins are pretty rare, even amongst coins fresh from the Mint!

Despite the fact that today, a coin-grading company can give each of your coins an official grade (for a fee of course) it is still important to learn basic grading for yourself. After all, if you intend on buying coins, not all of them will be in a professionally-graded slab– your eyes may have to do the grading! There are books and magazines out there that can give you illustration-by-illustration help in grading coins. But by in large, it takes practice, practice, practice. All kinds of tricky nuances come into play. What if you have a coin that grades XF but has a tiny hole at the top? What if your coin grades VF but is really dark and hard to see in its holder? What if one side of a coin grades Fine, while the other side grades About Good? What if the upper 70% of a coin’s obverse grades Fine, while the lower part grades Good? (Hint - in all cases, the grade should get a lower “net” grade than what you’d probably LIKE to give it).

At the same time, while you are working on your grading skills – also be working on your overall evaluating skills. What does an “original” coin look like? What does a naturally toned coin looked like? What does an UN-naturally toned coin look like? What are the tell-tale signs of a cleaned coin? These are all skills that are acquired over years. But don’t look at it as “study.” As I’ve said in other articles, coin collecting should be fun. The process of learning to grade and evaluate the coins in your collection, or coins that you intend to purchase, should also be fun. Ok, paying too much for a coin that you over-graded or evaluated too highly may not be the most fun you’ve had in the world. Still, any seasoned collector will tell you— allow yourself some mistakes in the beginning. That’s how you BECOME a seasoned collector!