How Coin Grading Works

Key Takeaways

• Coin grading standardizes how collectors and dealers assess a coin’s condition
• The Sheldon Scale (1–70) remains the industry benchmark.
• Grading determines authenticity and condition—not monetary value.

If you are involved with coin collecting or numismatics, you’ve undoubtedly encountered the notion of coin grading. Coin grading is the process of evaluating a coin’s physical condition based on factors like wear, luster, strike quality, and eye appeal.

Coin collecting, in the United States at any rate, is a relatively modern pursuit. The Coinage Act of 1857 greatly encouraged its growth by eliminating foreign coins as legal tender and replacing the large cent with the smaller, more practical cent. These changes spurred interest in American coinage, and people began keeping coins for posterity and, increasingly, as potential investments.

However, even though there were early discussions about how to judge the quality of a particular coin, there was a tremendous amount of guesswork and supposition about whether a coin was as advertised—and that’s assuming that everyone was honest, which they often weren’t.

The informal discussions finally crystallized in 1977, when the American Numismatic Association released its seminal guide, The Official American Numismatic Association Grading Standards for United States Coins. Although grading concepts had existed for decades, this publication standardized and unified the practice, first in the U.S. and later abroad.

The debut of the ANA’s grading standards largely solved one of coin collecting’s biggest issues—disagreements between traders. Instead of individual dealers and collectors making subjective assessments, there was now a guidebook outlining the different factors that comprised a coin’s grade.

It’s worth noting that coin grading itself does not determine value. While a confirmed grade and authentic condition can influence a coin’s price, grading is solely about determining authenticity and physical state—not how much it might sell for. So, having your coins graded isn’t investment advice—it’s simply a way to achieve clarity and confidence about your holdings.

This page is your guide to understanding how coin grading works, why it matters so much, and the controversies surrounding the practice. If you have a coin you are considering grading, the information below should answer most of your questions.

The Basics of Coin Grading

As mentioned above, coin grading is the examination of a coin to determine its authenticity and condition. Put simply, an expert determines whether a coin is genuine, what its backstory may be, and what kind of physical shape it’s in.

The central question a grader must answer is what numerical grade to assign to the coin. The numerical grade measures the coin’s physical condition and quantifies the level of wear or damage it has sustained.

The Sheldon Coin Grading Scale

Coins are graded on a scale of 1 to 70, with 70 being the highest grade and 1 the lowest.

This is known as the Sheldon Coin Grading Scale, created in 1949 by Dr. William Sheldon. Sheldon originally designed the scale for Early Large Cents (1793–1814), but decades later, the ANA adopted it as the foundation of modern grading standards.

Each Sheldon grade consists of an abbreviation and a number, separated by a hyphen. The abbreviation offers a qualitative summary of the coin’s condition, while the number provides a precise rating.

The scale separates coins into two categories: circulated and uncirculated. Uncirculated coins—those that have never entered general circulation—are classified as “Mint State” and receive grades of MS60 or higher. These typically represent the best-preserved examples of a given coin type.

Here are the commonly recognized circulated grades on the Sheldon Scale (with some intermediate values used for added precision by professional grading services like PCGS and NGC):

About Uncirculated (AU): AU-58, AU-55, AU-53, AU-50
Extremely Fine / Extra Fine (XF or EF): XF-45, XF-40, XF-35
Very Fine (VF): VF-30, VF-25, VF-20, VF-15
Fine (F): F-15, F-12
Very Good (VG): VG-10, VG-8
Good (G): G-6, G-4
About Good (AG): AG-3
Fair (FR): FR-2
Poor (P): P-1

Both PCGS and NGC apply these grades, often with intermediate numbers, to provide additional accuracy.

NGC (Numismatic Guaranty Company) and PCGS (Professional Coin Grading Service) are the two leading grading organizations in the world. Both use the Sheldon Scale but may differ slightly in how they interpret certain grade boundaries—reflecting the human element that remains part of grading.

The Key Grading Factors

Professional graders assign grades after evaluating several key factors, including:

• Strike Quality: How well and sharply the coin’s design was struck at the mint.
• Surface Imperfections: The presence of scratches, marks, or damage on the surface. Microscopic imperfections, often visible only under magnification, can distinguish the highest grades.
• Luster: The coin’s brilliance or reflective quality.
• Eye Appeal: The overall visual attractiveness of the coin.

While grading standards are well established, there’s still some subjectivity involved. Two coins with the same grade can appear slightly different, and collectors sometimes resubmit coins to seek a more favorable evaluation.

Before the ANA’s standardization in the 1970s, terms like “Good” or “Fine” were used inconsistently. If you’re examining a coin with an older grading record, consider having a modern service like NGC or PCGS perform an updated evaluation.