Coin Grading
Why Are Coins Graded
Not all coins are created equal. Even from the U.S. mint, quality varies due to striking irregularities. Factor in circulation wear, and there are a myriad of differences in the condition of coins. The higher the quality of a rare coin, the more desirable it is. Therefore, coins are graded as a means to determine their quality against each other.
What Are The Various Grades
A standardized grading system was developed years ago that is widely accepted. These grades are:
AG-almost good
G-good
VG-very good
F-fine
VF-very fine
XF-extremely fine
AU-almost uncirculated
MS-mint state (uncirculated)
Why There Are Different Grades Of Uncirculated
Uncirculated means no wear from being used in commerce. Even though a coin may grade uncirculated, which means NO circulation wear, the handling and transport of coins from the mint in commerce often resulted in a coin getting "bag marks" from contact with other coins in the same shipment. These bag marks are not circulation wear. This is why there are 11 different ratings for uncirculated coins from MS60 to MS70. MS is the abbreviation for mint state which means no wear from being used in commerce. The higher the number, the nicer the specimen. The only coins which grade MS70, which has no flaws, are current mint issues which were only handled by gloves and not allowed to come into contact with other coins. These MS70 graded coins are routinely found in Silver Eagles, Gold Eagles, and other modern day commemorative strikes.
Grading Companies
Grading companies are third party grading services rendering an opinion of the grade of a coin. There are several grading companies but the two most respected companies are PCGS and NGC. These two companies in particular have developed a reputation for consistent grading of the various issues. They are independent companies and have no interest in the ownership of the coins they are grading. There are other grading services, but many are dismissed by knowledgeable collectors and dealers due to various reasons.
Slabs, Holders, Certification, Registration
When a grading service receives a coin, they first determine whether the coin is authentic or a counterfeit. Once verified as authentic, they then determine if the coin has been altered to make it appear more valuable as well as determine if the coin has been cleaned. Once they finish this process, the coin is then evaluated for its condition, assigned a grade, and encapsulated in a sealed holder or "slab" which is meant to prevent the coin from being switched or altered. Each slab has a certificate or label which identified the coin and the grade assigned. The label includes the date of the coin, mint mark, denomination, grade, and yes, a serial number. This does not prevent counterfeiting slabs, which is common in some countries, but does help in reducing the number of victims being cheated by dishonest operators.
Buy the coin not the holder
Looks Sell
The more attractive a coin is the more desirable it is. That goes for other things in life as well. Buying coins with good eye appeal with make looking at your collection more enjoyable AND probably make it easier to find buyers when you are ready to sell..
Equal Grades Is No Guarantee Of Equal Desirability
Pick out four or five coins of the same grade and you may find a noticeable difference in looks. One coin may be dark versus another with a lighter look. One may have mottled toning and another may have a halo appearance. One may be toned dark and another have a bluish color. Yet, all of these coins are graded the same. Which one is most appealing? That may vary from buyer to buyer. The bottom line is, some coins will look nicer than others of the same grade.
Premium Looks Bring Premium Dollars
Select your coins for grade, rarity, and of course, personal enjoyment. Owning coins with premium looks will increase your personal satisfaction as a collector and increase the demand for them when reselling.