by Mitch Hight

What is Grading?

Grading is a way of determining the condition of a given coin. The late Dr. William H. Sheldon devised a grading scale of 1-70, with 1 being a barely identifiable piece and 70 being a flawless specimen. This basic grading scale has been widely used since. All of the third-party grading services that I know of, as well as the American Numismatic Association and virtually every rare coin dealer that I've ever met, have all adopted this grading system.

Adjectives used to describe a coin's grade often relate to a number on this scale of 1-70. Naturally, a seller has a tendency to use additional superlatives to describe his/her wares. The commonly understood adjectives are as follows:

  • POOR - P01
    OVERVIEW: Barely identifiable. Also referred to as basil state.
    EYE APPEAL: None.
    WEAR: The amount of wear is so massive that sometimes only the date and a few details are visible. If the date is not visible, the coin can be graded only if it is a one-year type.
    MARKS: There can be numerous marks, though when a coin is this worn, the marks are usually worn down as well.
  • FAIR - F02
    OVERVIEW: Extreme wear, but outline of some device elements are visible.
    EYE APPEAL: Practically none.
    WEAR: There will only be partial device detail visible. The date can be weak or almost missing. The rims may be worn completely.
    MARKS: There may be numerous marks, but usually the surfaces are smooth from wear.
  • ABOUT GOOD - AG3
    OVERVIEW: Major wear. Able to make out most digits of the date.
    EYE APPEAL: Little to none.
    WEAR: The wear will be considerable, with the rims mostly gone, sometimes blending with devices.
    MARKS: There may be numerous marks, but usually the surfaces are smooth from wear.
  • GOOD - G4 to G6
    OVERVIEW: Heavily worn. Major designs visible, but with faintness in areas.
    EYE APPEAL: Very little eye appeal, but nice even wear can be pleasing to the eye.
    WEAR: Only the outlines of the major devices are still visible. The minor devices/lettering around the periphery will be worn but still clear. Note: For some series (e.g. Barber coinage), there will be some wear into the top parts of the reverse lettering.
    MARKS: There may be marks, but they should not be severe.
  • VERY GOOD - VG7 to VG10
    OVERVIEW: Well worn. Bold major designs, absence of fine detailing.
    EYE APPEAL: Any eye appeal is due to clean surfaces and lack of marks.
    WEAR: There will be a few details visible in the devices. The peripheral devices/lettering will be sharp and clear. The rims will be complete. For coins with "LIBERTY", there will be one or two letters visible or parts of several letters evident.
    MARKS: There should be no major marks, since most will be worn away.
  • FINE - F12 to F15
    OVERVIEW: Moderate even wear, bold entire design with some weaknesses.
    EYE APPEAL: Any eye appeal will be due to clean surfaces and lack of marks.
    WEAR: There will be some detail visible in the major devices. For series with "LIBERTY", there will be four or five letters partly or wholly visible. For types with eagles, the breast feathers may be worn completely and wing feathers will show from 25 to 50 percent of their detail for choice fine specimens.
    MARKS: There may be minor, medium, or large marks, but nothing too severe.
  • VERY FINE - VF20 to VF35
    OVERVIEW: Generally light wear, moderate wear at high points.
    EYE APPEAL: The cleanness of surface and lack of marks constitute most of the eye appeal. The originality of the coin is also an important factor in the overall eye appeal and ultimately the grade. Lightly cleaned coins are almost penalized one or more grading points. Light cleaning on lower-grade coins (below VF) is not quite as important to the overall grade. Note: Heavy cleaning is NOT acceptable (or even gradable) except for the very lowest of grades (such as Poor through About Good).
    WEAR: There will be detail in major devices, though some blending may be evident. For types with "LIBERTY", all the letters will be visible, though some may be indistinct. For reverses with eagles, breast feathers will be mostly worn away and wing feathers will show most of their detail.
    MARKS: There may be minor, medium or large marks, but not enough to detract from the grade.
  • EXTREMELY FINE - EF40 to EF45
    OVERVIEW: All design details sharp, light wear at highest points. Lustre and strike are now to be considered in the overall assignment of the grade.
    EYE APPEAL: Eye appeal will be determined by clean surfaces, lack of and placement of marks, and originality.
    WEAR: The amount of wear is still quite evident. Some of the highest points of the coin's detail are worn away. Some definition of individual parts of the devices will be worn down. Approximately 90 percent of the original major detail is still evident.
    MARKS: There may be a few minor marks or perhaps one medium-size mark.
    LUSTER: There will be minimal luster remaining. For many coins, there may be no luster except for slight amounts around devices such as stars, arrows, etc.
    STRIKE: The strike will range from below average to full.
  • ABOUT UNCIRCULATED - AU50 to AU55
    OVERVIEW: Original mint luster with traces of wear at highest points.
    EYE APPEAL: The eye appeal is now a function of surface preservation, lack of and placement of marks/hairlines, luster remaining, and originality.
    WEAR: There is still some wear evident. There can be friction in the fields ranging from half to all of the unprotected areas. The high points will have wear that is very obvious to the unaided eye.
    MARKS: There may be many marks/hairlines. However, many minor marks/hairlines will be worn away, as much of the original surface shows some wear.
    STRIKE: The strike will range from weak to full.
    LUSTER: The luster can range from poor to full. From 50 to 100 percent of the surface may have luster disturbance. In some cases, the only luster remaining will be around protected devices.
  • CHOICE ABOUT UNCIRCULATED - AU58
    OVERVIEW: Original mint luster with only the slightest trace of wear. Also referred to as a "slider". The only wear may be from cabinet friction, from generations of residing in collector cabinets, albums and holders.
    EYE APPEAL: The eye appeal is usually very good. Since marks are usually very minor, the eye appeal will be determined mainly by strike, luster, and originality. Some AU-58 coins are lightly cleaned or dipped uncirculated coins which are no longer considered uncirculated because of the light cleaning or rubbing that is now present. These coins can be just as attractive as coins that are graded uncirculated - and sometimes even more so. Often these coins will have fewer marks than low-grade uncirculated (MS60-MS62) coins. WEAR: There will be slight wear on the highest points of the coin. In some cases, 5X magnification is needed to notice this wear, and sometimes it can be noticed by slowly tilting the coin in the light source. This method often may show the slight friction as discoloration. Very often, the obverse will have slight friction and the reverse will be full mint state (often MS-63 or higher).
    MARKS: There are usually very few marks for this grade. Instead of marks, the principal detractions on the typical AU-58 coin are rub or hairlines. The few marks should not be major nor in prime focal areas. A coin that would grade AU-58 from a wear standpoint, but has numerous marks, should be graded AU-55, AU-53 or lower.
    STRIKE: The strike can range from below average to full. Note: A very weak strike would be downgraded to AU-55, AU-53 or lower.
    LUSTER: The luster can range from poor to full. There will be noticeable breaks in the luster on the high points. These areas will be visible to the unaided eye, but should be less than 10 percent of the surface area.
  • UNCIRCULATED - MS60
    OVERVIEW: Original mint luster with no trace of wear; moderate bag marks.
    EYE APPEAL: The eye appeal can be negative to neutral.
    MARKS: Numerous. The marks/hairlines will probably cover all of the coin's surface. On larger coins (half dollars and higher), there may be some areas that have few or no marks/hairlines. The marks/hairlines can be large and in prime focal areas. Note: Sometimes the mark is NOT from "normal" contact with other coins or from circulation, and thus would be considered damage, and the coin might not be graded.
    STRIKE: The strike can range from very weak to full.
    LUSTER: The luster may be poor, average, or full.
  • UNCIRCULATED - MS61
    OVERVIEW: Original mint luster with no trace of wear; moderate bag marks.
    EYE APPEAL: The eye appeal will be very negative to very slightly positive.
    MARKS: There may be marks/hairlines across the entire coin. There may be several severe contact marks/hairlines. If there are numerous large marks/hairlines in the main focal areas, then the fields should be cleaner, though they still could have some contact marks/hairlines. On larger coins (half dollars and larger), there may be areas with almost no marks/hairlines.
    STRIKE: The strike can range from very weak to full.
    LUSTER: The luster may be poor, average, or full.
  • UNCIRCULATED - MS62
    OVERVIEW: Original mint luster with no trace of wear; moderate bag marks.
    EYE APPEAL: The eye appeal will be negative to slightly positive. The negativity in this grade usually involves excessive marks/hairlines and/or the strike and/or lack of luster and/or unattractive toning . There can be one to three of the major criteria which contribute to negative eye appeal. Even coins with overall positive eye appeal usually have one or two areas that are negative. Thus, a coin with numerous marks/hairlines but with average strike and luster may grade MS-62, while a coin with just a few marks (probably in the wrong places) and weak strike and luster also may grade MS-62.
    MARKS: The marks/hairlines may cover most of the coin. If the marks/hairlines are light, they may be scattered across the entire coin. If there are several severe marks/hairlines, then the rest of the coin should be relatively clean.
    STRIKE: The strike can range from very weak (e.g. some New Orleans Mint Morgan dollars) to full.
    LUSTER: The luster can range from poor to vibrant.
  • CHOICE UNCIRCULATED - MS63
    OVERVIEW: Exceptional mint luster; no wear; light bag marks.
    EYE APPEAL: The eye appeal can be slightly negative to very positive. The "average" MS-63 will have neutral eye appeal (noticeable marks/hairlines, average to above average strike, and average luster). However, quite a few coins are graded MS-63 because of negative appearance. If either the luster, strike, or marks/hairlines are below the standards set forth here, then one of the other criteria must be exceptional for the coin to attain MS-63.
    MARKS: There may be numerous marks/hairlines, including several major marks/hairlines in main focal areas. If there are distracting marks/hairlines on the major devices, then the fields should be relatively clean. If there are distracting marks/hairlines in the fields, then the devices should have less disturbance.
    STRIKE: The strike will range from slightly below average to full.
    LUSTER: The luster can be below average to full. The toning can seriously impede the luster. On brilliant coins, there can be significant breaks in the luster. Red copper can be considerably mellowed. There can be noticeable spotting, including several large spots or a group of small ones. Note: If the luster is poor, then the coin would not be graded MS-63 even if the strike were full and the marks/hairlines were acceptable for the grade.
  • NEAR GEM UNCIRCULATED - MS64
    OVERVIEW: Exceptional mint luster; no wear; light bag marks.
    EYE APPEAL: The eye appeal can range from slightly negative to very positive. This is a nice coin, so anything too negative would preclude the MS-64 grade. Balance is a key. A coin with marks/hairlines in obvious focal areas would have to have great luster or some other positive factor to attain MS-64. A coin with less severe marks/hairlines hidden in devices could have impaired luster or some other problem and still be graded MS-64. Coins with deficiencies and no redeeming characteristics are graded MS-63 or lower.
    MARKS: There may be numerous minor marks/hairlines, several significant marks/hairlines, or other defects . There may be a few minor marks/hairlines in the main focal areas or one or two significant marks/hairlines in the main focal areas. On minor coinage (dime coinage and smaller), there may be several marks/hairlines in the fields or main focal areas, though none should be too severe. On larger coins, these marks/hairlines may be more severe in the fields or main focal areas. However, a severe mark/hairline would have to be of a size that would preclude grading the coin MS-65 though not so severe as to reduce the coin to MS-63. If there are several fairly heavy marks/hairlines in obvious areas, then the coin would grade MS-63.
    STRIKE: The strike will range from average to full.
    LUSTER: The luster can be slightly below average to full, and toning can impede the luster. On brilliant coins, there may be breaks in the luster caused by marks or hairlines. Red copper can be considerably mellowed. There may be noticeable spotting for this grade, though heavy or large spotting would reduce the grade to MS-63 or below.
  • GEM UNCIRCULATED - MS65
    OVERVIEW: Blazing original luster and virtually no surface flaws.
    EYE APPEAL: The eye appeal will be average or above. This is a very nice coin. However, there are many ways a coin can grade MS-65. This grade (or MS/Proof-64) may have the largest range of eye appeal. A coin may grade MS-65 with scattered light marks, but with great luster and strike - or a coin with virtually no marks but slightly impeded luster also could be MS-65. The overall eye appeal still must be positive or the coin does not merit MS-65.
    MARKS: There may be several scattered marks, hairlines, or other minor defects. If the flaws are in a main focal area, then they must be minor and fewer. Hidden marks and hairlines can be larger. On dime type and smaller, they almost always must be in the devices or be very minor if they are in the fields. On larger coins, there can be marks/hairlines in the fields and in the devices, though no major ones.
    STRIKE: The coin will be well struck.
    LUSTER: The luster will be average (almost always above average), and any toning can only slightly impede the luster. Copper coins can have mellowing of color for red and unevenness of color for red-brown or brown coins. Note: There can be minor spotting for copper coins.
  • GEM UNCIRCULATED - MS66
    OVERVIEW: Blazing original luster, virtually no surface flaws and good strike.
    EYE APPEAL: The eye appeal will almost always be above average for a gem-quality coin, and many MS-66 coins will be superb in this category. Any negative factors must be compensated for in another area.
    MARKS: There may be several minor, but noticeable, defects. If marks or hairlines are in an important focal area, then they must be minimal and compensated for by the rest of the coin's being superb.
    STRIKE: The coin will be well struck.
    LUSTER: The luster will be above average (usually far above average), and any toning should be attractive and only minimally impede the luster. Red copper can have mellowing of color, and there can unevenness of color for red-brown and brown copper. Very minor spotting may be present, though it should be noticed only upon close examination. A dipped coin must be "fresh" in appearance and never give the impression of being cleaned.
  • SUPERB GEM UNCIRCULATED - MS67
    OVERVIEW: Blazing original luster, virtually no surface flaws and incredible strike.
    EYE APPEAL: In almost all cases, the eye appeal will be superb. An MS-67 coin is a visual knockout, and any deficiencies will be compensated for in another area.
    MARKS: Any abrasions on the coin are extremely light and/or well hidden in the design and do not detract from the coin's beauty in any way. As with MS-68 coins, the fields on smaller coins are usually nearly flawless, especially on the obverse. On large silver coins with smooth devices (e.g. Morgan dollars), the flaws will usually be found in the fields; on large gold coins (such as Liberty Head $20s), the fields will usually be superb in this grade, with only minor flaws in the devices.
    STRIKE: The strike will be very sharp, and almost always full.
    LUSTER: The luster will be outstanding. Any toning (even if slightly uneven) must be attractive and not impede the luster in any way. Red copper can have mellowing of color, and there can be unevenness of color for red-brown and brown copper. Minute spotting, if present, should be virtually unnoticeable.
  • SUPERB GEM UNCIRCULATED - MS68
    OVERVIEW: Blazing original luster, virtually no surface flaws and incredible strike.
    EYE APPEAL: Exceptional, with no major detractions. Any negativity will be compensated for by another area that is spectacular. (For example: The head on the MS-68 Walking Liberty half dollar is a little too softly struck for the grade, but the coin has the most beautiful rainbow toning imaginable which compensates for the strike.)
    MARKS: A nearly perfect coin, with only slight imperfections visible to the unaided eye. The imperfections (tiny contact marks, minuscule hairlines, a small lint mark, etc.) will almost always be out of the range of the coin's focal points.
    STRIKE: The strike will be exceptionally sharp.
    LUSTER: The luster will be full (or virtually so) and "glowing," with any luster breaks being extremely minor and usually restricted to the high points. Slight unevenness in toning is acceptable, as long as it is still attractive. Red copper may show some mellowing, and there may be some unevenness of color for red-brown and brown copper.
  • NEAR PERFECT - MS69
    OVERVIEW: Blazing original luster, virtually no surface flaws and incredible strike.
    EYE APPEAL: Breathtaking!
    MARKS: A virtually perfect coin. It usually takes an intense study of the surfaces to ascertain why the coin won't grade MS-70. Only the slightest contact marks, nearly invisible hairlines, the tiniest planchet flaws, etc., are allowable for this grade. Note: Slight die polish, medium die breaks, or slight incomplete striking are not defects.
    STRIKE: The strike is extremely sharp, and will show 99+ percent of the detail intended.
    LUSTER: The luster will be full and unbroken. Any toning must be attractive. Only the slightest mellowing of color is acceptable for red copper, and only the slightest unevenness of color for red-brown and brown copper.
  • PERFECT - 70
    OVERVIEW: An absolutely flawless specimen!
    EYE APPEAL: The eye appeal is spectacular. This is the ultimate grade!
    MARKS: An MS-70 coin has no defects of any kind visible with a 5X (5-power) glass. Note: Minor die polish, light die breaks, etc., are NOT considered defects on business-strike coins.
    STRIKE: The strike is razor sharp, and will show 99+ percent of the detail intended.
    LUSTER: The luster is vibrant and undisturbed in any way. Any toning will be attractive. Only the slightest mellowing of color is acceptable for full red copper coins.

Importance of Coin Grading

Once a coin is determined to be authentic, an accurate grade must be arrived at in order to value the piece properly. What is the big deal about determining a coin's grade so accurately? Minute differences in grade can mean thousands of dollars difference in a coin's market value. This is especially true in Uncirculated or Mint State grades. Other times, a coin might be so rare that the difference between a Very Fine and an Extremely Fine specimen can make a large difference in a coin's value. Consider a coin with fewer than 12 known survivors, 11 of which are in poor condition, but one piece is in Extremely Fine condition. The finest of these coins may bring multiples of the total value for all of the other pieces combined.

Grading is Subjective

Beginners will have the hardest time with uncirculated grades. An uncirculated coin doesn't necessarily mean that its never been touched by human hands. How did it get made then? No, it means that the coin didn't actually perform its intended function in the channels of commerce, i.e. it did not circulate. Uncirculated coins have different grades based on how the coin was treated once minted. Some have a lot of bag marks from being tossed in a bag with others...and possibly taken on a 200 mile stagecoach ride to the bank of destination.

Every coin series has its particular features that show rub or friction before the rest of the coin. Many coins with just a little rub are classified as AU or About Uncirculated coins. Generally speaking, the major difference in a grade of AU and a grade of EF or Extremely Fine is one of luster. An EF specimen will be pretty much "all there", i.e. the features, design or devices as they're called, have not been worn away. As a coin continues to be used in circulation, it sees grades such as Very Fine(VF), Fine(F) and on down the line getting progressively worse until a Basil state or condition of Poor-1 has been reached.

Once you fully understand and appreciate that grading is a subjective art, you're halfway home. Grading of rare coins is anything but an exact science; however, grading is not just a bunch of smoke and mirrors either.

The absolutely necessary reference for grading U.S. Coins is the Official A.N.A. Grading Standards for United States Coins, published by the American Numismatic Association in 1987. For those interested, this title is available for purchase in our Books & Periodicals section.

Constant Change of Scope

In 1986, a new idea for grading coins became a reality with the creation of a third-party grading and encapsulating service, the Professional Coin Grading Service or PCGS as we know them. Because of the popularity of this service, others soon followed. I should note that the A.N.A. had been grading coins for a fee prior to the creation of PCGS, but the coins were not encapsulated in a tamper-proof holder. Today, many rare coin dealers have a good portion of their rare coins housed in the inert holders from one or more of grading services such as those listed below:

  • Professional Coin Grading Service (PCGS)
  • Numismatic Guaranty Corporation (NGC)
  • Independent Coin Grading (ICG)
  • American Numismatic Authentication Collector Services (ANACS)
  • Sovereign Entities Grading Service (SEGS)
  • Photograde Coin Institute (PCI)

Because of the 3rd-party grading services' guarantees, you now have a safe way of avoiding counterfeits and extremely overgraded coins at the very least. Still, some collectors avoid coins in these holders for one reason or another. This is perfectly fine, especially for those who have developed a good knowledge on coin grading and authentication. Still, when it comes time to sell, many times these collectors will have their coins professionally graded prior to being offered on the market.

The Future of Coin Grading

Attempts have been made and research continues on a full-proof grading method performed by computers that will objectively score a coin based on luster, number of contact marks, fullness of strike, overall planchet condition and other factors. While I believe we may see this technique refined to the point of being used as the foundation to grading rare coins, I do not believe that collectors and dealers will view a particular specimen in the exactly the same light. Computers cannot rate beauty without a programmer telling the machine exactly how beauty is defined. In other words, the eye appeal factor, which is a big one to consider in my opinion, cannot be easily assigned by a computer.

Mitch Hight is the owner of Rarity Exchange Company. He has been involved in numismatics for over 30 years and is a life member of the American Numismatic Association. Mr. Hight may be contacted at Rexco, P.O. Box 8123, Colorado Springs, CO 80933 or by email at mitch@coin-gallery.com

 

 

 

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