Coin Grading and Certification
Why Grade Coins in the first place?
A coins grade is the #1 factor determining it's value. The higher the grade, the more the coin is worth relative to other coins of the same type, year, and mint location.
Coins are made of very soft metals. If they were made from hardened steel they'd all be pristine and grading wouldnt be a factor. Coins are instead made from gold, silver, copper, nickel, and zinc for the most part. If we take a look at the Mohs Scale of Hardness below we can see that these are soft or very soft metals.
Because our coins are very soft they are damaged easily. A coin in perfect condition is called Mint State. While a coin horrible condition is called Poor.
Sheldon Coin Grading Scale
These are the more commonly used coin grading levels. They are roughly based on the 1949 Sheldon Coin Grading Scale.
Listed best to worst.
- MS - Mint State
- AU - About Uncirculated
- XF - Extra Fine
- VF - Very Fine
- F - Fine
- VG - Very Good
- VG - Very Good
- G - Good
- FA - Fair
- P - Poor
Each of these will have subsets. Example MS-63, MS-64, MS-65 and so on.
How Coin Grades Effect Values
For instance, a 1909 S VDB Lincoln Wheat Penny is possibly worth $3,500 if the coin has a grade of MS-65. If this same coin is MS-63 however its worth half of that $1,700. If same coin again were to be graded (F) or Fine it's now only worth $800.00, and if the coin is in poor (P) condition it might only be worth $10 to $30.
3rd Party Grading
Having a 3rd party like PCGS, NGC, or ANAC grade a coin provides an unbiased and fair grading mechanism for the marketplace. Most companies have 3 different persons asses the coins grade and use those opinions to determine the final grade. The coin is then slabbed in a permanent holder, labeled, and then entered into a public database.
Coins are made from soft metals. Because they are soft these coins are easily damaged. Damaged coins are worth less. When coins are certified by 3rd party companies, the coin grade can be trusted to be fair and truthful.
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