Coin Grading Basics for Collectors: What You Need to Know

Coin grading is an important factor in determining the value of a coin. Ungraded coins can be subject to damage or deterioration due to environmental factors, even if they are in excellent condition. To determine the quality of a coin, it is necessary to grade it. Grading a coin can often increase its value significantly more than an ungraded coin of the same condition. In this article, we will discuss the importance of coin grading and how it can affect the value of a coin.

The value of a coin is determined by its degree of wear and tear, the level of care it has received, and any damage it may have sustained. Grading coins on a 70-point scale is the starting point; however, small details in its appearance can elevate it to the next level.

In contrast, the coin’s value is not as greatly impacted by its size and location as it is by its appearance; this difference, however, will also be the factor that contributes to its downgrade to a lower level.

Coin grading should be conducted by a trusted dealer to ensure accuracy and fairness. If you are uncertain as to why your coin has a certain value, you can request an explanation from the dealer. It is important to find a reliable dealer who can provide you with the necessary information and expertise. Reputable dealers will grade your coins honestly and offer a fair price.

1. The 70-Point Coin Grading Scale

Ungraded coins have no guarantee of grade or status, in contrast to coins that have been certified by a professional grading company using the Sheldon Scale, which assigns a numerical grade from 1 to 70. Initially, coins were classified according to condition description (e.g. very good, good, excellent, poor, etc.), but this proved to be problematic due to the subjective nature of these terms.

Numerologists in 1970 established standards for coin grading, assigning a numerical value to a coin’s condition on a scale from P-1 (Poor) to MS-70 (Most Perfect). The most sought-after coins are those that fall within this range.

2. The Three Coin-Grading Buckets

It can be challenging for some to comprehend how coin scales work. However, those without expertise in this area can use a simpler method of sorting coins: imagine three buckets. The first bucket is for circulating coins, the second bucket is for coins in About Uncirculated (AU) condition, and the third bucket is for non-circulating coins in Mint State (MS) condition.

• First Bucket: P-1 through EF-49 coins are the most common type of coin, with little to no high value. These coins are heavily worn from circulation, making them almost unrecognizable. However, some coins with slight wear on the embossed details may be placed near the top of the scale.

• Second bucket:AU-50 coins, though not in use, may still be found with signs of wear from passing through multiple coin counters. These coins may have been processed in limited quantities, and are no longer available from the Bang Mint. Additionally, “ugly” coins, which have a poor aesthetic but stable details, are in circulation but cannot be reproduced.
• Third bucket: MS60-70 coins are considered the base state, as they are not cyclical and have an unattractive appearance. However, they are still preferable to AU-58 coins due to their “no circulation” factor. The most perfect degree of coins is MS68-69-70.

3. How to Grade Circulated Coins

Scoring coins is made easier when an uncirculated specimen is available for comparison; however, if one is not available, the most common and distinguishable coins in circulation can be used as a reference. In such cases, the following steps should be taken.

3.1 Step 1

In order to accurately distinguish a coin, a bright white light source, such as a 75 watt LED bulb, is essential. This will ensure that any color differences on the surface of the coin can be easily identified.

A magnifying glass with a magnification of 5x to 8x is often used by collectors and sorting dealers to observe details such as scratches, abrasions, and signs of counterfeiting, as these can significantly affect the value of a coin. A magnification of less than 5x will not provide sufficient detail to properly examine a coin, whereas a magnifying glass with a magnification greater than 8x is unnecessary.

3.2 Step 2

Determining the bucket to which your coins belong is a simple process. To facilitate this, ask yourself the following questions: once you have identified the correct bucket, you can move on to the next step.

• In which group does it fall on the Sheldon scale?
• Is it a non-circulating coin?
• Are there any signs of counterfeiting that you can see with the naked eye?
• Are mint marks, era names, or tall details such as symbols and borders blurred?
• Is it in the most popular bin of the coin crate in circulation?

3.3 Step 3

Compare coin A (type EF – 40) to the scale shown in section 1 to determine its place on the scale. Similarly, compare coin B (type EF – 20) to the same scale to ascertain its position. As the rating numbers of each coin cannot be the same, an example can be used to illustrate the difference between them. Coin A exhibits minimal signs of wear, with a loss of detail of only 5-10%. Conversely, Coin B has suffered a significant deterioration in its condition, with a loss of detail of up to 60%. This difference in condition is reflected in the respective values of the two coins.

In order to accurately assess them, a comparison of the two must be conducted in writing. Without expertise, simply viewing them is insufficient for identification. For a more precise score, readers should consult the “ANA Official Scoring Standards,” which provides detailed scoring criteria for each major U.S. coin, accompanied by photographs to aid in accurate assessment.

Coin grading is a process used to determine the market value of a coin. Ungraded coins are typically worth less than those that have been graded, however, they can be a risky purchase as the buyer may end up losing a significant amount of money. To ensure the right valuation, it is important to find a reputable coin grading service. This article has provided an overview of the coin grading process and its importance in determining the market value of coins.

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