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Whether you’re new to coin collecting or a seasoned coin investor, you need to know what your coins are worth. Coin grading doesn’t use a precise formula, and the process is subjective. However, knowing how to grade coins—whether circulated, uncirculated, numismatic, bullion, or proof coins—is a valuable skill that can come in handy.
In this coin grading guide, the investment experts from Oxford Gold Group will explain everything a beginner numismatist should know about evaluating the market value of precious coins, plus a brief history of coin grading, the Sheldon Scale, how to grade coins, and more.
What Is Coin Grading?
The purpose of grading a coin is to determine its physical condition and market value. Grading coins depends on specific variables, such as:
- Eye appeal
- Contact marks
- Mint state
- Strength of strike
- Major features
The scale for grading is a whole number between one and 70. Coins with a higher grade are in better condition, with 70 being a flawless, perfect coin.
While it may seem simple to determine a coin’s value, it’s more of an art than a science. It requires extensive knowledge—even small contact marks or nicks can significantly affect the worth of a coin, from hundreds to thousands of dollars.
Common grades include:
- Poor (P-1): Damaged and barely identifiable.
- Very Good (VG-8): Generally dull and worn with noticeable contact marks.
- Very Fine (VF-20): Generally acceptable with moderate wear, the word LIBERTY or the coin’s motto is still readable.
- Extremely Fine (EF-40): Shows light wear, but the finer details are clear.
- About Uncirculated (AU-50): Light wear or small marks on the coin’s highest points. It has acceptable eye appeal but may show contact marks.
- Mint State Basal (MS-60): Uncirculated coins with no wear on the highest points, large marks or hairlines, no attractive eye appeal, and slightly dull luster.
- Mint State Acceptable (MS-63): Uncirculated coins with several small contact marks, a poor or average strike, and at least half of the original luster.
- Mint State Choice (MS-65): Uncirculated with attractive high quality and no large detracting contact marks or numerous small contact marks. Above average strike and no wear on the higher surface features.
- Mint State Perfect (MS-70): The unicorn coin. No flaws or imperfections. The coin is bright, with its original luster, a sharp strike, and not a single detracting mark.
History of Coin Grading
“Back in the olden days,” grading coins was highly subjective. At first, there were only two terms: new and used. However, those terms expanded to include:
- Good: Circulation has worn the coin’s surface, but major details are still visible.
- Fine: The minor details aren’t as worn, and a little of the mint luster shines through.
- Uncirculated: Major and minor details are in sharp relief, and the mint luster is near perfect.
However, in the late 1800s and early 1900s, coin collecting and numismatics grew in popularity, and it was quickly apparent that a more accurate system for grading was necessary. In 1948, Dr. William Sheldon created the Sheldon Scale to standardize grading coins.
What Is the Sheldon Coin Grading Scale?
The Sheldon Scale runs from one to 70 and is the industry standard that coin dealers and coin collectors follow. A 70-grade coin is an utterly perfect coin, extremely fine, uncirculated, and with flawless eye appeal. It has no bag marks, scuff marks, or wear on the high points; it also has exceptional eye appeal and bright luster.
The only coins that reach the highest points of 70 are uncirculated coins, which don’t suffer from wear and tear like circulated coins. In addition, the Sheldon Scale also has “mini-scales,” which include:
- Uncirculated Coins (Mint State or MS)
- About Uncirculated Coins (AU)
- Circulated Coins
The most common coin type is circulated coins, ranging from P-1 (poor) to EF-49. Circulated coins have been in public use, whereas uncirculated coins come directly from the mint. Uncirculated grades are the most valuable coins.
How to Grade Coins: Step-by-Step
Here’s a quick guide on how to grade coins:
First, work under a bright light source, at least 75 watts. Keep at least one foot of space between the coin and the light. Gently hold the coin by its edges between your thumb and index finger.
Use a magnifier or jeweler’s loupe (6x to 8x magnification) to properly view and assess the coin’s date, major design elements, bag marks, scuff marks, mint marks, and the coin’s design. Check if the coin has an original, darkened, or lightly toned color and whether it has a poor, fine, or average luster (or shine).
When viewing the coin’s major features, determine which mini-scales the coin fits into based on its physical condition. For example, does it have slight wear on its high points and very few contact marks? If so, that would fit into the “About Uncirculated” category. Again, mint state is “Uncirculated.”
The Circulated State is the most common and includes coins with unattractive scuff marks, heavily worn coins, noticeable contact marks, striking or planchet defects, and moderately heavy marks.
While gently holding the coin in your thumb and forefinger, rock it slowly and rotate it in a circle. You can now see the finer details on the coin, like hairlines, small rim nicks, and contact marks. Consider these questions:
- Does the coin have pleasing eye appeal?
- Is it lightly worn?
- Does it have its original mint luster?
- Are there several detracting scuff marks?
Be as precise as possible.
Compare the overall condition of the coin to the Sheldon Scale. How does it match up to comparable coins? Consider all the features, but don’t obsess over the micro-details, as this can lead to incorrect grading.
How Do You Know if Your Coins Are Worth Grading?
Before you pay to grade a coin, determine the likelihood of attaining a positive ROI (return on investment). Add up the cost of shipping, grading, turnaround time, and insurance. A common modern coin might only be worth grading if it is in Mint State condition. A 2000 Lincoln Cent with an MS-68 grading is worth about $80. But with a grading of MS-70, this same coin could be worth over $2,000.
Common date coins (except uncirculated or silver dollars minted before 1873) and type coins (except AU+ condition and mid-1800s or earlier mintage) usually aren’t worth grading.
Best Company for Grading Coins
The United States (compared to foreign coin valuation) has four major companies for grading coins that offer certification from the Third Party Grading database (TPG). Coin dealers and collectors worldwide know these four companies are the best for grading circulated, uncirculated, and proof coins:
- The Professional Coin Grading Service(PCGS), the world leader in numismatics, offers Tru-View (high-def) coin photography and standard to secure-plus grading.
- The Numismatic Guaranty Corporation(NGC) is the largest organization for grading in terms of volume. This ANA-endorsed organization doesn’t grade coins with any modifications.
- The Independent Coin Graders(ICG) only offers grading services and has significantly lower fees than the PCGS and NGC.
- The American Numismatic Association Certification Service is the oldest service for United States coins and has been certifying extremely rare coins, tokens, and metals since 1972.
How Much Does it Cost to Get a Coin Graded?
Coin grading costs vary between companies. For example, current membership fees from the top two professional grading companies in the US (PCGS and NGC) are:
- Silver Tier: $69/year
- Gold Tier: $149/year (four grading vouchers)
- Platinum Tier: $249/year (eight grading vouchers)
- Associate: $25/year
- Premium: $149/year ($150 NGC credit)
- Elite: $299/year ($150 NGC credit and bulk discounts)
These membership fees don’t include the individual price of grading each coin you submit (charges vary by coin type and maximum value), which could be $5 to $65.
Invest in Coins Today with Oxford Gold Group
Now that you’ve finished our coin grading guide for beginners, you should know the knowledge, skill, and eye for detail that go into determining a coin’s grade, quality, and value.
If you’re interested in investing in coins, we’re here to help. Call Oxford Gold Group today at (833) 600-GOLD to speak with one of our representatives and learn more about the services we offer for precious metal investors.