A Guide to Coin Grading (With Chart & Pictures)

Understanding coin grading is crucial for any coin collector. This article will go into depth about how to grade coins and why coins are graded in the first place.

What Is Coin Grading?

Coin grading is the process of evaluating the physical condition of a coin. This is done by assigning a numerical value to a coin on the Sheldon scale between 1 and 70.

This visual comparison will help you see the difference between coins of different grades. Image: Silvercoins.com

The amount of wear on a coin's design is the main factor that determines a coin's condition, and therefore its grade. Coin designs become worn through contact and use as money. This causes the details of the major design elements to appear to fade away. It also removes the coin's original mint luster.

Aside from wear, the condition of the coin may also be affected by any distracting marks. This could be scratches, stains, or any other damage. In addition, any alterations to the surface of a coin such as cleaning, tooling, or "dipping" in a new layer of metal will also dramatically detract from its overall condition.

Always remember that in numismatics (coin collecting), cleaning or otherwise manipulating the surface of a coin is considered a cardinal sin.

Also note: within the Mint State grades (MS60 to MS70), some platforms will also use adjectival grades to describe the condition of these coins.

You can read more about the history of coin grading by following the link to an excellent article from Hubert Walker and Charles Morgan of CoinWeek.

Overview of Third-Party Grading Services

Beginning in the 1980s, independent third parties began offering professional coin grading as a service to collectors. For a fee, they will carefully evaluate the condition of a coin as well as authenticating the coin. Then the coin is safely sealed in a case or holder (often called a "slab" by coin collectors) that identifies the coin type and displays its grade. The grade is on a numerical scale from 1 to 70 and is based on the coin's condition: how worn down it is, how pristine its surfaces are, etc. It's a very similar process to the grading system used for other collectibles such as comic books and trading cards.

This practice of professional coin grading was gradually adopted as a standard by the numismatic industry. Over time, it became more and more essential to the hobby. Coin grading is an indispensable service that has helped everyone involved—from collectors and coin dealers to auction houses and selling platforms. In addition to weeding out counterfeits, coin grading has created clearer standards for evaluating (and valuing) different coins.

Comparing NGC vs PCGS

There are several third-party grading companies. Among them, two stand out as the most respected, most reliable, and most trusted. These are Numismatic Guaranty Company (NGC) and Professional Coin Grading Service (PCGS). They are headquartered in Sarasota, Florida and Santa Ana, California, respectively.

With four decades of experience and well-respected track records, NGC and PCGS have set themselves apart from other lesser-known TPGs. Many coin collectors view the two services as roughly equal in most regards. There are perhaps minor differences worth mentioning here. In a very general sense, NGC is seen is a bit more collector-friendly—i.e. their grading standards are somewhat less harsh—whereas PCGS is seen as being a little more stringent when it comes to handing out high grades. Overall, you won't go wrong if you choose either of these companies to grade your coins.

How Are Coins Graded?

Under magnification, the flaws in a coin's condition can become much more apparent. Numismatic experts working at coin grading companies will view a coin under 5x magnification. This serves several purposes. It allows the grader to accurately evaluate the amount of wear on the coin's design, as well as determine that it is authentic. It also helps reveal if the coin has been "doctored" or manipulated by cleaning, dipping (also called "whizzing"), or tooling.

In most cases, multiple experts will evaluate a coin and assign it a numerical grade in their expert opinions. Then the final grade you receive will be an average of their individual grades. They will also attribute any special varieties to the coin that apply.

There are a few reasons that a third-party grading service might refuse to assign a grade to a coin, however. First and foremost, a coin will not be graded if it is deemed inauthentic—i.e. a counterfeit coin. Authentication is part of the grading company's job. A coin may be rejected for grading if it is badly damaged, as well.

How to Grade Coins Yourself

The blog SilverCoins.com makes the excellent observation: “Half science half art, the skill of grading coins can be learned with time and use.” With this in mind, you can learn how to grade coins yourself. In fact, it's important for you to do so if you want to be a successful collector.

Sure, you could exclusively buy coins that are already professionally graded. But if you want to be able to cherrypick raw (ungraded) coins, you will need a keen eye for grading coins yourself.

The best way to get an accurate sense for the grade of a coin is to use reference images. These are helpfully included in most coin collecting guides that focus on specific coin series, such as those published by Whitman Publishing. It can also be helpful to have some examples of a particular coin design in-hand.

With enough time and experience, you can become a skilled coin grader yourself. This will immensely improve your enjoyment of the coin collecting hobby.

Of course, the informal grading you do yourself is no replacement for professional third-party certification. The two leading coin grading companies are Numismatic Guaranty Corporation (NGC) and Professional Coin Grading Service (PCGS). They are the industry standard and provide a great deal of useful information about the coin grading system on their respective websites.

Why Do We Grade Coins?

This is both a philosophical question and a practical matter. We'll break this into two parts:

1. Why you should have an understanding of grading coins
2. When (or in what circumstances) you should get a coin professionally graded

Understanding Coin Grading When Buying and Selling

Aside from overall rarity and the level of collector demand, the condition of a coin is the biggest determinant of its value. This is why grading matters and should be very important to any coin collector.

As a general rule, the better the grade of a coin is, the higher the value of the coin. So if you care about how much your coins are worth—as most collectors do!—then grading is essential.

Grading has a big impact on the buying and selling coins, unsurprisingly. Graded coins are typically more liquid, meaning they are easier to sell on the marketplace. The exact value of a graded coin (also called a certified coin) is also much easier to determine than a raw coin, although there may be some variation based on the coin's eye appeal.

When to Get a Coin Graded

The most important times to get a coin graded are:

• the coin is quite rare
• the coin appears to be in excellent condition
• the coin might be a valuable variety or error coin
• you want to be certain the coin is authentic

If any of those conditions are true, then getting a coin professionally graded is probably appropriate.

However, there are exceptions. You might not elect to get a coin certified if it's not particularly lucrative to do so. Such a situation might be a modern coin whose valuation doesn't increase by much in Mint State grades. A good example would be a common modern bullion coin such as an American Silver Eagle. Although grading may increase its resale value slightly, the fees for having the coin graded will outweigh any profit from a higher price.

Read more about the nuances of coin collecting and numismatics from the experts at Gainesville Coins:

Collector Resources for Understanding the Hobby of Collecting Coins

How to Collect Coins for Beginners: Coin Collecting 101

What Is an Uncirculated Coin? Guide to Condition and Value

What Is a Gem Coin? Understanding Quality, Rarity, and Value

What Is a Proof Coin? Definition and How to Identify Proofs

What Is a Brilliant Uncirculated Coin (BU Coin)? Beginner's Guide