Currency Grading Tutorial


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This is the how-to guide on grading the condition of rare and collectible currency.

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Currency Grading Tutorial

  1. 1. Currency Grading TutorialHeritage Auctions3500 Maple Ave. 17th FloorDallas, TX 75248
  2. 2. Currency Grading TutorialView grading tutorials for coins and other collectible typesSuperb Gem Crisp Uncirculated (or Superb Gem CU): A flawless note, visually perfect in every way. Nofolds, bends, rounded corners, or counting crinkles are permissible at this grade level, and the centering must besuperior for the issue. The paper will be crisp and original, the embossing (where applicable) must be bold, andall four corners must also be perfectly sharp. The overall aesthetic quality at this grade level should beoutstanding for the issue. Notes in this grade are rare, even in the most common series.Gem Crisp Uncirculated (or Gem CU): A crisp, perfectly centered example that has perhaps one tiny flawthat limits the grade-perhaps a microscopically frayed corner, or an almost imperceptible crinkle in the paper.The note must be absolutely original, with bold embossing and bright colors. Any flaw that is readily evident,such as a noticeable counting crinkle or slightly imperfect centering, will prevent a note from receiving a GemCU grade. Notes in this and any Uncirculated grade will, of course, have absolutely no folds or bends.Choice-Gem Crisp Uncirculated (or Choice-Gem CU): This is an intermediate grade that is reserved fornotes that are nicer than a typical Choice CU note, but have one or more minor flaws that just barely prevent aGem CU rating. Such a note might have perfect centering and otherwise flawless paper quality, but a minorcounting crinkle would prevent a Gem grade. An otherwise flawless note with slightly imperfect centeringmight also fall into this category. Notes in this and any Uncirculated grade will, of course, have absolutely nofolds or bends.Choice Crisp Uncirculated (or Choice CU): A note in this grade will be a strictly Uncirculated note, with nofolds or bends present even under close scrutiny. The paper quality and eye appeal will be above average for theissue, and any flaws present will be minor in nature. Imperfect centering is acceptable at this grade level,although any note with severe centering problems cannot attain this grade. A counting crinkle or two isacceptable, as well as a microscopically frayed corner or two. Any combination of these or other problemswould drop a note into a lower category. A Choice CU note should be a pleasing, original example with nomajor distractions that are readily apparent.Crisp Uncirculated (or CU): A note in this grade must be strictly Uncirculated-with no folds, bends, orwrinkles present, even when viewed very closely under a strong light. A bent corner tip may be acceptable atthis grade level if there are no other flaws, but only if the bend is within the margin and it does not affect thedesign. If the bend is large or there is more than one, the note cannot grade CU. Such a note may have centeringproblems, counting crinkles, or microscopically rounded corners, but the note must be strictly free of folds orbends. A note that is otherwise Choice or Gem CU but has been processed or pressed might fall into thiscategory.Choice Almost Uncirculated (or Choice AU): A note in this grade will be a "just miss" for a Choice CU gradeor higher. It will have above average eye appeal and will be attractive for the issue, but a bent corner or lightvertical centerfold will keep it from an Uncirculated grade. Two light vertical bends are acceptable for thisgrade, as long as the surface of the paper is not "broken." More than one light fold or a heavy fold or crease will
  3. 3. drop the note into a lower grade classification.Almost Uncirculated (or AU): An AU note will have one or more light folds that are not heavy in nature orobtrusive 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 maybe present at this grade, but two heavy folds or creases will drop the note to a lower grade level.Extremely Fine (or XF): A note in this grade will be bright, fresh, crisp, and attractive, but a few light folds orbends may be present. The overall eye appeal will be above average, and only the slightest soiling may bevisible. A note in this grade might have a few light folds or several very minor bends, or a couple of verticalcreases 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 thisgrade level if the three vertical folds are not heavy and there are no other apparent flaws. A typical XF note mayhave a couple of pinholes, but any larger holes would prevent a note from reaching this grade level.Very Fine (or VF): A VF note should have nearly full remaining crispness, although several folds, wrinkles, orother 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. Severalminor pinholes may be visible when the note is held to a light. The corners may be slightly frayed or slightlyrounded at this grade level, but the paper should retain nearly full crispness and there should be no loss of colorin the design.Fine (or F): A note in this grade will resemble most notes that have spent considerable time in circulation. Thepiece will have lost some of its crispness, but the paper will still be solid. (A limp note without any crispnesswill classify at a lower level.) The corners may be slightly frayed or rounded, and the edges may also be frayed.Pinholes may be readily apparent, but none should be large or obtrusive. A few minor edge splits are notuncommon in this grade, but they typically will be within the margin and not affect the design. No major stainsor tears may be present, although a stray pencil marking or light teller stamp will not affect the grade at thislevel if it is not dark or obtrusive.Very Good (or VG): 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 fromcirculation, 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.Good (or G): A note in this grade will be heavily worn, soiled, torn, taped, holed, or missing small pieces fromthe design. It will still be roughly intact, and readily distinguishable by series and design type. Damage or wearmay be rather severe, but any note that is missing large portions of the design or is barely attributable may fallinto an even lower grade classification, such as Fair or Poor.A brief comment about intermediate gradesIntermediate grades such as XF-AU, VF-XF, Fine-VF, VG-Fine, or Good-VG are often used to indicate a notethat is nicer than the lower grade level, but just misses the higher classification. For example, a note with threevertical folds and a horizontal fold cannot technically grade XF, but it might be much nicer than a typical VF-anintermediate grade of VF-XF is then used in this instance. A plus sign (+) may also be occasionally affixed to agrade, indicating that the note is a nice, problem-free note for the assigned grade with claims to a higherclassification.Processed, washed, and pressed notesIt is an unfortunate aspect of our hobby that unscrupulous people will attempt to pass some things off assomething they are not. Methods to "improve" the look or grade of a note abound, and it is common to see notes
  4. 4. where any number of these methods have been attempted. The most common is to wash the note (usually withsoap, detergent, or bleach) and flatten it (often with an iron), and starch is even sometimes added to stiffen thenote and add crispness. While a beginning collector may be easily fooled by such a note (and even expertsoccasionally miss one), enough practice will enable any collector to readily spot a "doctored" note. A fewpeople in the hobby still maintain that a processed note is an "improved" note, but the portion of the hobby thatviews originality favorably has gradually overwhelmed this view, and processed notes are usually traded at adiscount and graded at a level or two lower than their apparent grade. A processed note can usually be detectedby fading or loss of color, especially where the note was once folded. Folds can often be difficult to detect, butthe evidence of a fold can never be completely removed. Sometimes even the smell of a note is a deadgiveaway-and sometimes it may be the only way to determine if a particularly good job was done in processinga note. On an Uncirculated note, a lack of original embossing is a telltale sign of a pressed note. Patience andattention to detail can often prevent hundreds or even thousands of dollars worth of mistakes.Damaged and repaired notesSome common sense is necessary when grading damaged or repaired notes. A collector should research thedifferent methods of repairing a note, and be able to recognize these methods. Sometimes it is actually possibleto "improve" the appearance of a note by repairing or restoring the paper (particularly when a tear is closed or amissing piece is restored), but the note still must be classified as damaged and repaired, and special care shouldbe taken to make sure any note does not have a subtle or imperceptible repair. Some repairs are deceptive, andwhether this deception is done intentionally or not a collector can get "burned" on such a note. The assigning ofa grade to a damaged or repaired note is a matter of opinion in some sense, but common sense should dictate thefinal evaluation. A general rule to follow is to consider at what level one would be indifferent to a damaged noteas opposed to a problem-free note in a lower grade. For example, if a collector would be equally content with astained CU note or a problem-free VF, then a fair classification of the stained CU note might be at the VF gradelevel. At Heritage, we will give an overall grade to a note, and then describe the paper quality of the note andthe flaws that are present. For example, a note may be graded VG, but in the catalog description of the note itmight state that it has the paper quality of a VF but a corner tip has been torn off.Some general comments about grading and valueGrading is, of course, an art, and not a science. While counting folds is relatively easy, determining eye appealand what a note in a certain grade should "look" like takes time, experience, patience, practice, and a certainlevel of common sense. If a note looks really nice and might pass for AU but is technically only an XF or XF-AU, it will often bring a price commensurate with an AU grade regardless of the technical grade. Eye appeal isoften more important than a technical grade in determining a notes value. This only makes sense-most peoplewould rather own an attractive, problem-free, well centered AU note with a vertical fold down the center ratherthan a generally unattractive note that technically merits a CU grade. Approach grading with common sense andknowledge about what merits a given grade, and have fun-which is, after all, the most important aspect ofcollecting.Heritage Auctions, headed by Steve Ivy, Jim Halperin and Greg Rohan, is the world’s third largest auction house, withannual sales more than $750 million, and 600,000+ online bidder members. For more information about HeritageAuctions, and to join and gain access to a complete record of prices realized, along with full-color, enlargeable photos ofeach lot, please visit to get the up-to-the-minute updates and breaking news stories about Heritage Auctions? Get them as they happenat:; Facebook: view a complete archive of Heritage pressreleases, go to: