The Sheldon Scale for Grading U.S. Coins
In 1949, Dr. Wiliam Sheldon, a well-known and respected coin collector, numismatist developed a system for grading coins. Originally a more simple system of adjectives, in today's coin collecting world, it has been expanded to combine adjectives and numbers to delineate 70 different grades.
Poor-1 or P-1 (Poor) - This coin is either badly damaged or worn smooth.
Fair-2 or FR-2 (Fair) - This is a damaged or extremely worn coin. The date and type can barely be discerned.
AG-3 (About Good) - This coin is also worn, but the type and date are still discernable, although some spots may be worn out. Parts of the lettering should be visible, even if not completely legible.
G-4 (Good) - A heavily worn coin with the outlines of the major emblems, lettering, and features still evident.
G-6 (Good-plus) - Still heavily worn, this coin has a full rim with major emblems and features clearly outlined.
VG-8 (Very Good) - Significanly worn, but with full rim and clearly discernable emblems and features. Most printing are readable clearly, but the overall aspect is significant wear.
F-12 (Fine) - A moderately worn coin with distinct rim, readable printing, and clear emblems showing some detail.
VF-20 (Very Fine) - Still moderately worn, but clearly readable with lightly worn printing, detailed emblems, rims are clean. Most wear shows on the higher points of the coin.
VF-30 (Good Very Fine) - Printing is clear, emblems show all details with a little wear, and high points are lightly worn.
EF-40 (Extremely Fine) - Printing is sharp, emblems are clear but with slight though obvious wear on the high points.
XF-45 (Choice Extremely Fine) - Printing and emblems are clear and sharp, though with slight wear on the high points. This coin will have very good eye appeal.
AU-50 (About Uncirculated) - Very sharp printing and emblems with only a trace of wear on the highest points. To meet the requirement of this classification, there must be some mint luster remaining.
AU-55 (Good About Uncirculated) - Sharp printing and emblems with only a hint of wear on the high points. Whatever mint luster remains must be at least half as the original, with great eye appeal.
AU-58 (Choice About Uncirculated) - Coin appears uncirculated, except for minor wear on high points. Nearly all mint luster should be present, with outstanding eye appeal.
MS-60 (Mint State Basal) - Coins in this grade are in mint condition and free of wear, but are ugly, banged-up, bag-marked, off-toned specimens.
In grades starting with MS-60 and going to MS-70 (MS 61, MS-62, etc.) including "proof" coins, the criteria are eye appeal, luster, tone, and presence or absence of various marks. MS stands for Mint State. A "proof" is a type of coin, not a grade.
Despite the fact that there is a wide range of categories for grading coins, knowing how to grade coins is a skill developed over time and involves exposure to a wide range of coins and usually some coin collecting training.