Coin Grading Systems: A History and Comparison.

The origins of coin collecting are unknown, but we can be certain that the hobby developed on different continents in different ways. As the hobby became more widespread, there was a need to create a language to communicate to other collectors and dealers about coins and specifically their condition. These were the days way before photography, so a verbal or written method was needed.

At one time Great Britain had the largest amount of Public and Private collections of coins and as a result had the largest community numismatists (specialist, researcher or well educated collector of coins) in the world. This network of specialists spread across the world, as far as the British Empire reached. As English was the most widely spoken language, the English system began to be used globally and others branched off from this. You could say that the British system was the first true grading system.

The basic British, or UK system if you prefer, from top to bottom is;

FDC - Fleur de Coin: Exclusively for Proof specimens that are pristine. No wear or damage at all.

UNC - Uncirculated: A coin that is as it left the mint with no sign of wear or circulation, pretty much 100% of the detail still visible. UNC coins can have very slight marks, scratches and damage, often referred to as “bag marks”. Bag marks are due to the coins being in contact with other coins during their process of manufacture. It’s inevitable when there are so many coins mass produced at one time and making contact with each other. This grade might be applied to a modern coin that you get from the bank, in a bag, that was minted this year (and you’re early in the year).

EF - Extremely Fine (sometimes abbreviated as XF): Coins that show very little wear from circulation, 95% of the original design still remaining. The slightest of wear to the highest spots is visible. Scratches and damage must be at an absolute minimum. Some mint lustre (sheen) may still be present. On a modern coin, this may be something that has been in circulation for a year. On older coins, an Ef coin would have been in circulation for less time as the metals used were generally softer (Gold, Silver, Copper, Zinc, Aluminium).

VF - Very Fine: Coins are losing a little of the finer details such as defined hairs, jewels, small features of animals faces or fur etc. 75%, possibly more, of the original design showing. This may be a coin that’s been in general circulation for 5 years as an example.

F - Fine: These are starting to show a serious amount of wear to all the higher areas, no more than 50% of the design missing. On portraits almost all the detail of hair has gone. Sometimes definitions of partings, pony tails etc. are visible. If the same coin was in circulation for 25 years, this would most likely be in this area.

Fair: Heavily worn coins, usually with no more than 25% of the original design remaining. Writing, dates and general features are usually easily identifiable. Not the most attractive of coins. Unless these are a rarity or particularly old, the majority in this grade aren’t worth a lot.

Poor: Coins of this grade are excessively worn, usually around 10% of the original design remaining. Some of the lettering or date may have worn smooth. The main parts of the design may be smooth with all of the fine details missing. This isn’t a grade that is often used as coins in this condition tend to end up in the “metal buckets” where low value coins are stored until there is enough to sell for the metal content. Again, there are exceptions, but not many, only great rarities.

Below poor is often not much more than a disc that used to be a coin. Not even any good for heads or tails.

Other terms have been used to expand on these grades such as Almost, About, Near, Good etc. Almost, about and near mean it didn’t quite hit the mark (Almost Uncirculated). Good means a little better, Good Very Fine being better then Very Fine, which is better than About Very Fine. Plus or minus is occasionally used for a coin that’s a good example of the grade, but not quite the higher grade e.g. VF+, not quite an EF or EF- not quite EF.

From a personal point of view, I don’t like the term uncirculated. It gives the impression that it has come straight from the mint to your hand, but in reality it’s most likely passed through several hands, pockets and purses before reaching your collection, so can’t honestly be classed as uncirculated. Michael Gouby, a very well respected British authority, on Pennies in particular, started to use the term “Practically as Struck” (PAS), which is a more honest term. It’s my hope that the wider community will adopt this.

How does all this translate to other countries?

Below is an approximate comparison of the systems used by these countries. Incidentally, other countries that speak the same language often use the same system.

Most of these countries follow a similar pattern starting with the lowest and ending with FDC at the top. What is missing from the table above is the system used in American Numismatics. The US, and most third party grading companies* use the Sheldon Scale. This was a scale invented by William Herbert Sheldon. This system was devised and first presented to The American Numismatic Association (ANA) in 1949. His intention was to present a new grading system for early American Cents. The basic scale was as the table below on the left, and a comparison to the British system on the right.

As time went on the ANA adapted this scale to include more grades between 1 and 70. They also systematically analysed how it worked with other US coins and a complete grading system was born.

Most countries are protective of their own grading systems and don’t look set to change them in the near future, but the main third party grading* companies are US based, so my prediction is that it will start to become more commonly used internationally. Technically this would mean that each coin, from each country would have to be re-examined and a set of rules devised to govern grading of these coins, but that’s not what’s happening at the moment.

*What is a Third Party Grading Company?

When you buy and sell coins, one of you is the first party, the other is the second party. Coin Grading Companies, that only grade coins, are a third party in this process. They aren’t directly involved, but they are involved.

A grading company should be independent, i.e. not have an interest in the outcome of the grading. They will look at each coin's own merits and grade without bias. When they are finished, it’s normal to seal the coin in some kind of packaging, a slab or wallet is the most common. This packaging is usually tamper proof and contains the grading information.

At one point I could see the need for third party grading companies. In a time before advances in digital photography it was a great way to ensure the coin you were buying is the coin you were expecting. Coin dealers’ lists didn’t always have pictures, and when they did they weren’t usually great. Online or emailed images lacked the resolution needed to see the finer details. Today we have mobile phones that are capable of taking better pictures than the best camera set up of 20 years ago. These are capable of producing images that you could almost use to grade a coin. Assessing its other characteristics such as whether it’s genuine, the correct size and weight etc. is another story.

My personal opinion is that third party grading companies aren’t always useful. Having coins graded does add a considerable cost to a coin and doesn’t always get that back when a coin is sold.

Grading companies based in a particular country tend to have a great expertise on coins from that country, but the grading can go a little wobbly with coins outside of their “everyday” pieces. Errors that haven’t been picked up, weakly struck coins being graded as more worn than they are, and misidentified varieties are all things I’ve seen. Often the seller of these coins sends them for grading as they are outside of their scope of knowledge, so they have absolute trust in the grading company.

Coin grading is subjective, it’s all based on opinions and this is something we all have to be aware of. Some of these opinions should be more reliable than others, some might not be as reliable, this we have to understand. As a buyer, seller, collector of coins, we all have to be comfortable with making our own assessments as our opinion counts. If you’re buying a coin and seeing it “in the flesh”, make sure you take the time to look at it, use magnification and lighting, move the coin back and forth in the light, tilting it to assess its surface lustre or condition. If you’re buying online and can’t see enough of the detail you want to see, ask for more pictures.

If you disagree with another person's grading, that’s okay. It’s then your choice whether to walk away, discuss it with them (although many take it personally), or make a decision based on your own opinion.

The Future.

Where will coin grading go from here? Who knows? My prediction is that grading scales will become more detailed. We’ve already seen this with the addition of “almost” and “+”. The Sheldon scale is complex, but allows a much greater expression of condition. Greater communication and transparency throughout the hobby can only be a good thing.

This is a natural progression that is driven by society as a whole. Authentication and validation are required by the general public more and more. Dishonesty and scams have left consumers feeling cheated, so they now demand guarantees.

For me the downside is that professionally graded material ends up getting sealed in boxes and will lead to collectors being a little more disconnected from the items they love to collect. I still enjoy handling coins (very carefully) and looking at them in great detail. I have less of a connection to pieces that are sealed away.

Damian J. Miles

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