One of the first rules of coin collecting is that condition is key. If you have two coins of the same denomination and year, the coin that’s in better condition will almost always be worth more. This probably sounds obvious, even if you don’t have any experience collecting coins. Putting this idea into practice, however, is a bit more complicated. One collector might describe a coin’s condition as “pretty good”, while another might say the same coin is in “rough shape”. To keep things simple for buyers and sellers, we would need to develop a standardized, universal system to categorize a coin’s condition. Luckily, such a system exists, and we call it coin grading.
Within this system, each coin receives an exact grade. The higher the grade, the better the condition, and usually, the higher the value. To help you learn more about how coins are graded, and how their grade affects their value, we’ve put together this guide to U.S. coin grading, including what the system is, how it works, and who can use it.
What Is Coin Grading?
Coin grading is a systematicmethod for determining the physical condition of a coin. Without coin grading, you might look at two coins of varying conditions and see that one coin looks older and more faded, but you wouldn’t have specific language to rank the exact difference between the two. Using the tools of coin grading, however, you can use exact terms, definitions, and numerical values to assign each coin a grade that corresponds to a specific condition.
Coin grading allows for greater fairness across the world of coin collecting since everyone in the business is referencing the same qualifiers that separate a coin in good condition from a coin in very good condition, for example. Furthermore, coin grading allows you to discuss the condition a coin is in without ever even seeing the coin in question. By reading the grade it has earned, a knowledgeable coin collector can clearly envision what state the coin is in.
What Is the Coin Grading Scale?
The basis of the coin grading process is the coin grading scale. This is the established and universally agreed-upon scale that lists every possible coin grade for everything from the oldest, dirtiest, and most worn-out coin to the most perfect and unblemished coin. No matter what condition a coin is in, professionals can use the scale to give the coin a specific grade. Owners and dealers alike will then use this grade to determine the coin’s appropriate market value.
The basics of the coin grading scale were first invented in 1949 by Dr. William H. Sheldon. Dr. Sheldoncreated a 70-point scale that numismatists could use to grade a coin’s condition, with 70 representing a coin in the best possible condition and 1 representing a coin in the most worn condition possible. In addition to this 70-point system, he divided the numbers into broader descriptive categories. This system was later adopted by the Professional Coin Grading Service (PCGS), who modified it slightly to create the coin grading scale we use today.
Let’s look at the coin grading scale, as well as some of the explanations of different grades:
· Poor (P)-1: Coins in this category are smoothed and worn-down to the point that they’re almost completely unrecognizable. Any distinguishing details are difficult or impossible to pick out. The coin itself may be physically damaged, and the date is either missing or illegible.
· Fair (F)-2: These coins are like poor-graded coins in that they’re well-worn, smoothed, and potentially damaged. While lettering may have vanished and images may be unrecognizable, enough of the date is present to identify the coin.
· About Good or Almost Good (AG)-3: Coins with this grade feature a date and type that are readable, although they may be faded. Signs of other illegible and faded type may be visible. The outlines of designs will be visible but difficult to distinguish.
· Good (G)-4, 6: These coins will still feature heavy wear-and-tear, but any major designs or writing will be distinguishable, even if only by their outline. Details are likely indistinguishable, but the date and the type will be readable.
· Very Good (VG)-8, 10: Very good coins will have clearly distinguishable features and a full rim. Despite moderate to heavy wear, most lettering will be readable.
· Fine (F)-12, 15: Fine coins are a lot like very good coins, with easily recognizable features and mostly legible lettering. They will have moderate wear, but the wear will be distributed evenly across the coin. Most commonly, graders distinguish these coins by their rim that is clearly separated from the field.
· Very Fine (VF)-20, 25, 30, 35: These coins have less consistent and more moderate amounts of wear. Although the lettering is worn, it is clearly readable. All devices and designs are visible, including recognizable details, and the rims are distinct.
· Extremely Fine (XF or EF)-40, 45: These coins will be lightly although still obviously worn. The wear is localized to the highest point of the coin, the lettering is sharp and clear, and the designs are full of visible details. In unscientific terms, this is the first grade where we can begin to see true signs of visual appeal and beauty.
· About Uncirculated (AU)-50, 53, 55, 58: About uncirculated coins will only bear slight traces of wear on their highest points. All designs and lettering will be clear and distinct, although the coin may have contact marks. These coins will retain 50% of their original luster at minimum, granting them a good level of visual appeal. This is the highest grade possible for a coin that has entered circulation.
· Mint State Uncirculated (MS Uncirculated)-60, 61, 62, 63, 64: These coins have never entered circulation and are in visibly good condition with an excellent amount of visual appeal. They will still have slight imperfections such as bag marks, edge nicks, or other marks, however.
· Mint State Choice Uncirculated (MS Choice)-65, 68, 69: These uncirculated coins have excellent eye appeal, all or nearly all of their original luster, and only the most passing imperfections. The higher the number rises, the closer the coin comes to perfect.
· Mint State Perfect Uncirculated (MS Perfect)-70: This uncirculated coin is in the very highest possible condition. It retains 100% of its luster, has no imperfections, and possesses terrific eye appeal.
Based on even the briefest glance at these coin condition ratings, we can see that a coin’s official grade consists of two components — a grade, and then a point value within that grade’s range. Some grades only have one possible point value, making the job simple. Other grades have a range of point values, and while every coin within that range will be in a similar condition, the ones with the higher point values will be in slightly better condition.
The coin grading system combines these two elements to give a coin a final grade. For example, a coin might be graded at VF-25, G-4, or AU-55. This grade then translates into real-world market value, with higher graded coins typically earning a higher price tag, and vice versa.
Circulated vs. Uncirculated Coins
As you look at this coin grading scale, you’ll notice that the last three designations are reserved for uncirculated coins, while all the preceding ones refer to circulated coins. The difference between these two categories of coins is simple. Circulated coins are those that have passed through wallets, cash registers, banks, and plenty of real-world financial transactions. Uncirculated coins, on the other hand, have never entered circulation.
It’s easy to assume that all uncirculated coins are in perfect and untouched condition, but as you can see from this scale, that isn’t the case. Some uncirculated coins acquire imperfections as well, whether from the bags they were in, the people who handled them, or even problems during the striking process. Because of factors like these, uncirculated coins still need to receive a grade as well.
Additionally, while it may look like uncirculated coins — those graded from 60 to 70 — are simply a continuation of the rest of the scale, they actually form their own miniature 11-point scale that happens to fall at the top of the full 70-point scale. In other words, even a scuffed and marked uncirculated coin would still receive a grade higher than a beautiful and unmarked AU coin, since the one belongs on the circulated scale and the other falls on the uncirculated scale.
How to Grade Your Coins
Wondering how you can grade your coin collection? The first and most important thing to realize is that you can’t grade them yourself. You can certainly study the grading scale, compare it to the coins in question, and estimate what grade they deserve, but it will not hold any official weight. If you want a grade that will be respected by anyone who sees it, you’ll need to visit an official grading service.
Although you can’t officially grade your coins, this doesn’t mean there isn’t value in estimating a grade. This process of estimation can be hugely helpful if your coins do not yet have an official grade, and you want to gain a rough idea of what grade they might receive before you visit a professional service. You may find that your first attempt at creating this estimation is a little rocky, but the more you practice, the more accurate you’ll likely find your estimates becoming. It’s important to realize that no matter how skilled you become, however, these home-grades will never replace a professional grade, which carries weight in all official numismatic circles.
If you want to give these estimations a try, here are the steps you’ll follow to create your own in-home grading estimate.
1. Gather the Right Supplies
To reach the most accurate estimate possible, you need a good magnifier. Ideally, you’ll want something that can magnify anywhere from five to eight times. You’ll use this tool to determine how many of the details on the coin’s surface remain visible. In addition to a magnifier, you need a bright light source that you can maneuver to be quite close to your work space. An excellent light source will ensure you don’t miss any details simply because it was too dark to see them.
2. Determine If the Coin Has Entered Circulation
Circulated coins fall into one category, while uncirculated coins fall into another. Because of this distinction, you’ll need to ask yourself which category your coins fall into before you can move to the next step.
3. Examine Your Coin
Using your magnifier and light source, carefully inspect the coin in question. Move through each of the grades we’ve described above and compare each one to the condition of the coin in front of you. Determine which grade seems most appropriate for your coin. This will be your estimated coin grade.
4. Test Yourself
Are you curious about how accurate your estimates are? One of the best ways to find out is to try assigning a grade to an already-graded coin. Don’t look at the grade ahead of time and complete the process as you ordinarily would. Once you’ve made your estimate, look at the official grade. How close were you?
Who Can Grade Coins?
To receive an official and universally recognized grade, you’ll need to visit a certified coin-grading service. In most cases, this will be one of two major organizations: theProfessional Coin Grading Service (PCGS) and theNumismatic Guaranty Corporation (NGC). While there are other grading services worldwide, these are the most widely known and well-respected. If your coin carries a grade from either of these two services, you can be sure the grade is accurate and will not be contested by buyers or other industry professionals.
Why Should You Get Your Coins Graded?
If you buy a coin from an established dealer or source, the coin will almost certainly already have a grade. The store or dealer in question would have used this grade to set a fair price for the coin as well as to assure buyers of its authenticity. In cases like these, you won’t need to worry about having the coin graded because the job has already been done for you.
On the other hand, if you happen to acquire a coin through any other means, you may find yourself in possession of a coin that has no grade. If this is the case, you might wonder whether it’s worth your time and effort to have the coin graded. We want to assure you that it’s always worth it to get your coin an official grade.
The most important reason to grade your coins is to establish their value. If you try to trade or sell your coins without any official grades, you will be largely at the mercy of buyers’ subjectivity. Even if you have a general idea of how much the coin should be worth, you will have no way to prove this to potential buyers and will most likely need to accept the best offer you get, regardless of whether or not it matches the coin’s true worth. By getting your coin graded, however, you can prove its worth and have a much better chance of getting a fair price.
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