What is Coin Grading and Why?
Grading is a way of determining the physical condition of a coin. Grades range from Poor (almost completely worn out) to Perfect Uncirculated (a coin with absolutely no wear and no flaws of any kind). Over 99.9% of all coins fall somewhere between these two extremes.
The grade is a sort of "shorthand" for describing the condition of a coin. With experience and the aid of the appropriate books, many people can learn to grade with a moderate degree of accuracy. PCGS's new Online Photograde Service is an extremely useful tool for determining approximate grades. Few people, however, can ever learn to grade with the precision required to become a professional. The grade of a coin goes a long way in determining the coin's value, and sometimes a seemingly insignificant and easily overlooked flaw can make thousands of dollars of difference.
Coins that have been properly stored since the day they were minted are called "uncirculated" or "mint state." If a coin saw circulation for a short time but still looks nearly brand new, it is called (or graded) "About Uncirculated." After that, the grades in descending order are:
EXTREMELY FINE -- VERY FINE -- FINE -- VERY GOOD
GOOD -- ABOUT GOOD -- FAIR POOR.
Uncirculated coins have different grades as well, depending on how carefully each coin was made, handled, and stored. Some uncirculated coins have heavy marks caused by contact with other coins during minting or storage. Other uncirculated coins are nearly free of such marks. The coin in the best state of preservation will almost always have the greatest value.
For a listing of PCGS grading standards, click here.
For more information about coin grading, click here.