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Currency Grading


Grading is the most controversial component of paper money collecting today. Small differences in grade can mean significant differences in value. The process of grading is so subjective and dependent on external influences such as lighting, that even a very experienced individual may well grade the same note differently on separate occasions.

Learning how to accurately grade currency is a skill that is learned over time after handling many notes. However, hopefully the information below will act as a crash course to understand the basics of what makes a note nicer than another.

The condition of a note is critical to its value. Lowering the grade of a note one notch can decrease its value by 1/3 or even 1/2. An expensive note which falls between two categories might be worth a thousand dollars more in the higher category than the lower one. Thus, it's often important to be more precise than using a limited number of categories.

But here's a general guideline... Note that many dealers have slightly different grading systems, or definitions of each grading system, especially with various sub-grades of uncirculated. Most collectible currency dealers, and collectors are pretty uniform in their definition categories, or at least closely similar by their definitions of each grading category. Unfortunately, there's no "official" system of grading currency.

For this reason, we have researched several different currency grade expert opinions, and have formulated our grading system and grade category definitions to be pretty much universally accepted. Our grading system was designed by bringing together a mixture of the most commonly used definitions by the top grading agencies. Therefore, we believe our grading system is about as widely accepted grading system as possible.

 


 


CURRENCY GRADE AND DEFINITIONS:

 

  • P - (POOR "2"):   Damage or wear may be rather severe, including ink marks, stains, missing pieces, and faded markings. Any note that is missing large portions of the design, or is barely legible may fall into this classification. These notes are often very brittle, and handling them will often cause additional damage.

  • F - (FAIR "4"):  A Fair note may be entirely limp, and lifeless. There may be excessive dirt, and markings on the note, and the color may be faded. It may have large pieces missing, severe creases, folds and crumpling evidence. There may also exist a combination of other signs of extreme circulation; Such as graffiti, large tears, stains and/or rust.

  • G - (GOOD "6"):  A note in this grade will be heavily worn, soiled, torn, taped, holed, or missing small pieces from the design. It will still be roughly intact, and readily distinguishable by series and design type. Damage or wear may be rather severe, but any note that is missing large portions of the design or is barely attributable may fall into an even lower grade classification, such as Fair or Poor.

  • VG - (VERY GOOD "8"):  At this grade classification, a note will be heavily worn with slightly rounded corners, frayed edges, or slightly rough margins. The paper will be intact, however, and no large pieces may be missing. A few edge splits may be apparent, although they must not be severe. The note will be limp or soiled from circulation, and some wallet staining may be visible. No major damage is acceptable at this grade level, however, and any note that has a large hole, stain, tear, or missing piece must fall into a lower grade category.

  • F - (FINE "15"):  A note in this grade will resemble most notes that have spent considerable time in circulation. The piece will have lost some of its crispness, but the paper will still be solid. The corners may be slightly worn or rounded, and the edges may also be worn. Pinholes may be present, but none should be large or obtrusive. A few minor edge splits are not uncommon in this grade, but they typically will be within the margin and not affect the design. No major stains or tears may be present, although a stray pencil marking or light teller stamp will not affect the grade at this level if it is not dark or obtrusive.

  • VF - (VERY FINE "20"):  A VF note should have nearly full remaining crispness, although several folds, wrinkles, or other signs of circulation may be present. Mild soiling might be apparent, but it should not be serious. No tears, stains, or other impairments should be readily apparent, and the note should still have nice eye appeal. Several minor pinholes may be visible when the note is held to a light. The corners may be slightly worn or rounded at this grade level, but the paper should retain nearly full crispness and there should be no loss of color in the design.

  • XF - (EXTREMELY FINE "25"):  A note in this grade will be bright, fresh, crisp, and attractive, but a few light folds or bends may be present. The overall eye appeal will be above average, and only the slightest soiling may be visible. A note in this grade might have a few light folds or several very minor bends, or a couple of vertical creases may be present. A note with a horizontal fold and three vertical folds cannot technically grade XF, although a very light horizontal bend that does not "break" the surface of the paper might be acceptable at this grade level if the three vertical folds are not heavy and there are no other apparent flaws. A typical XF note may have a couple of pinholes, but any larger holes would prevent a note from reaching this grade level.

  • AU - (ALMOST UNCIRCULATED):  An AU note will have one or more light folds that are not heavy in nature or obtrusive to the overall appearance. Three light vertical bends would be acceptable for this grade if they do not "break" the surface of the paper, but no more than two light folds may be present. One heavy fold or crease may be present at this grade, but two heavy folds or creases will drop the note to a lower grade level.

  • CAU - (CHOICE - ALMOST UNCIRCULATED):  A note in this grade will be a "just miss" for a Choice CU grade or higher. It will have above average eye appeal and will be attractive for the issue, but a bent corner or light vertical centerfold will keep it from an Uncirculated grade. Two light vertical bends are acceptable for this grade, as long as the surface of the paper is not "broken." More than one light fold or a heavy fold or crease will drop the note into a lower grade classification. Notes that are otherwise "UN-Circulated, but have been in the hands of a consumer as a collectible piece, must fall into this category. A note can only be deemed to be TRULY UN-CIRCULATED if it has never been in the hands of a collector, and has only been held by a currency dealer. Once a bank note is sold be a collectible currency dealer, to a currency collector, it is technically defined as a Circulated, or "AUC / ALMOST UN-CIRCULATED bank note.

  • UNC - (UN-CIRCULATED):  A visually perfect in every way. No folds, bends, rounded corners, or crinkles are permissible at this grade level, and the centering must be superior for the issue. The paper will be crisp and original, the embossing (where applicable) must be bold, and all four corners must also be perfectly sharp. The overall aesthetic quality at this grade level should be outstanding for the issue. Notes in this grade are rare, even in the most common series.



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