How to Grade Collector Coins
The value of collector coins is greatly impacted by the grade of the coins. A coin can be virtually worthless in a low grade but priceless in a high grade. Sometimes a difference of a single grade level can mean a difference in value of thousands of dollars. It is therefore essential that you grade your collector coins objectively and accurately. There are set rules for what qualifies a coin for a particular grade. These rules vary slightly by coin type since each coin type has its own unique design.
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Instructions
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Take precautions before you grade your collector coins. Never touch a collector coin with your uncovered fingers. Oils on your skin can permanently damage collector coins. Wear gloves or use padded coin tongs to handle them. Use a magnifying glass to enlarge the details of the collector coins while grading.
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Take a look at the overall appearance of the collector coin. If it is very shiny and shows absolutely no signs of wear, then it is likely an uncirculated coin. An uncirculated coin can have a few nicks from collisions with other uncirculated coins in coin bags from the mint, but they can not have any diminished detail on the high points of the coin's design. This is usually seen on the cheek of the person on the obverse and the center of the reverse design. Collector coins with no wear but plenty of bag marks are designed MS-60. MS is short for "mint state." The highest quality uncirculated coins can grade as high as MS-70.
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Notice if there are slight signs of wear on the high points of the collector coin. If it only has slight wear but still has excellent detail and some mint luster, then designate the coin AU for "about uncirculated."
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Examine the collector coin with your naked eye. If you can see slight signs of wear on the high points but otherwise excellent detail and condition, then designate the coin EF of XF for "extra fine." Both abbreviations are used and they mean the same thing.
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Notice if the collector coin has flat spots in the design from wear. If most of the coin's finer details are present but there are obvious signs of circulation, then designate it VF for "very fine." In order for a collector coin to qualify for this grade it must have all its lettering present and legible.
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Look for the "liberty" on any US coin. All coins made by the US mint have the word "liberty" on them somewhere. If the collector coin is worn but you can see all the letters in the word "liberty," then designate the coin F for "fine."
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Count the number of letters you can see in the word "liberty." If the collector coin is so worn that you cannot see all the letters in "liberty" but can still see three letters, then designate the coin VG for "very good." It does not matter which letters you can see as long as there are three.
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Examine the design of the collector coin. If you can make out the outline of the design even though there is little detail, then designate the coin G for "good."
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Designate all other collector coins either AG for "about good" or FR for "fair." The terms are interchangeable and both designations are considered junk coins. Collector coins in these categories have almost no design detail and few words still visible.
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