What does a coin's grade mean and how important is it?: Breaking down the basics of coin collecting

Coin World is introducing novices to numismatics one topic at a time
By , Coin World
Published : 06/04/14
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A coin’s grade determines much about its value, so new collectors need to understand how to read them.

“In today’s U.S. coin market, a basic understanding of grading is essential,” Coin World’s Making the Grade guide reads. “What one pays for the collectible coin he or she purchases or expects to be paid for the collectible coin when selling will ultimately hinge on the coin’s grade. In fact, many collectors and dealers will tell you the grade is just ‘short-hand’ or a tool for communicating value.”

Order Coin World's Making the Grade guide here.

Under a standard system widely used by the collecting community, a coin’s grade is represented by two components. The general category is represented by letters and the specific grade is represented by a number between 1 and 70.

General categories, and their abbreviations, are ordered as follows:

  • Poor — P
  • Fair — FR
  • About Good — AG
  • Good — G
  • Very Good - VG
  • Fine — F
  • Very Fine — VF
  • Extremely Fine — EF or XF
  • About Uncirculated — AU
  • Uncirculated — UNC
  • Mint State — MS
  • Proof — PF

Each of the general categories contains a specific range of more specific number grades.

The numbers, which come after the category abbreviation in a coin’s grade, go from 1, the worst condition in the Poor category, to 70, the highest grade a Mint State or Proof coin can receive. The combination of the two elements can appear spelled out, as in "About Uncirculated 55," or abbreviated, as in "AU-55" or "AU55."

Making the Grade notes that grades between 1 and 59 — for example, an AU-58 1794 Liberty Cap Right Half Cent — are given to coins that exhibit signs of circulation wear. Coins graded 60 to 70 — for example, an MS-67 1882 Morgan Dollar — must show no signs of wear.

Various factors are considered in assigning a coin a grade, with four being of major importance. James L. Halperin’s How to Grade U.S. Coins explains the author’s approach to grading coins, which is focused on these four factors: surface preservation, strike, luster and eye appeal.

It must be noted that grading is subjective, not objective. Even expert graders can study the same coin and arrive at different opinions about its grade.

In addition, grading standards have changed over time. A big change has been a shift from technical grading to market grading. STEVE: START INPUT HERE.

Michael Fahey writes about grading for Coin World in his "First Grade" column in each monthly print edition

This post is one in a Coin World series briefly explaining the basics of numismatics.

Check out the rest of the series:

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