Grading coins is a system by which one can describe the present condition of a coin in comparison to it's condition at the moment of manufacture.

From the moment coins are minted, they get marks and blemishes from contact with other coins and from being in circulation.

Grading gives collectors a common language by which they can describe their coins to others.

Numismatists in the United States, use a 70 point numerical scale. This scale uses the first 59 numbers to deal with circulated coins and the last 11 numbers with Uncirculated or Proof coins.

In the circulated grades, 1 to 10 points separate each grade. In the Uncirculated and Proof grades every number represents a grade.

These descriptions are very generic, remember, coins are a bit like snowflakes no two are exactly the same.

Some proofs, may have lint marks. When a proof die was wiped with an oily rag, sometimes threads, bits of hair, lint and so on would remain. When a coin was struck from such a die, a recessed impression of the debris would appear on the coin.

Each of the following numbers corresponds to a word description, I have also included some common abbreviations you might find on coin holders from various grading services.

Proof-70 Perfect Proof, (Perf. Proof)
A Proof-70 or Perfect Proof is a coin with no hairlines, handling marks, or other defects, in other words a flawless coin. Such a coin may be brilliant or may have natural toning.

Proof-65 Choice Proof, (Ch. Proof)
Proof-65 or Choice Proof refers to a proof which may show some fine hairlines, usually from friction-type cleaning or friction-type drying or rubbing after dipping. To the unaided eye, a Choice Proof will appear to be virtually perfect. However, 5x magnification will reveal some minute lines.

Proof-60 Proof
Proof-60 refers to a proof with some scattered handling marks and hairlines which will be visible to the unaided eye.

Coins with no wear at all are referred to as uncirculated or in Mint State (MS). Grades from MS-60 to MS-70 in one point increments are used for Mint State coins. Criteria include luster, the number, size and location of contact marks, the quality of the strike and overall eye appeal.

An MS-60 coin may have dull luster and numerous contact marks in prime focal areas, as long as there is no wear. To merit MS-65, a coin must have brilliant cartwheel luster (attractive toning is permissible), at most a few inconspicuous contact marks, and fairly complete or better striking details. Grades from MS-61 to MS-64 cover intermediate parts of this range. Truly exceptional coins may be graded MS-66, MS-67 or if absolutely flawless, as high as MS-70.

Terms such as Brilliant Uncirculated (BU), Choice BU, Gem BU, select BU and Premium BU are commonly used by dealers, auctioneers and others. There is no generally reliable correlation between these terms and the numeric MS grades. In fact, the potential buyer is still advised to verify that the coin is actually Uncirculated.

For circulated coins the grade is primarily an indication of how much wear has occurred and generally does not take into account the presence or absence of dings, scratches, toning, dirt and other foreign substances (though such information may also be noted).

ANA grading standards recognize 11 grades for circulated coins (listed here with brief, generic descriptions):

AU-58 Very Choice About Uncirculated
Just traces of wear on a coin with nearly full luster and no major detracting contact marks.

AU-55 Choice About Uncirculated
Only the smallest amount of wear will be found on only the highest points of the design. Most of the mint luster must be evident.

AU-50 About Uncirculated
Very light wear on the highest points, still has at least half of the original mint luster.

EF-45 or XF-45 Choice Extremely Fine
All design details are sharp, some mint luster remains, though perhaps only in "protected areas".

EF-40 or XF-40 Extremely Fine
Slightly more wear than a "45", traces of mint luster may show.

VF-30 Choice Very Fine
Light even wear on high points, all lettering and design details are sharp.

VF-20 Very Fine
Most details are still well defined, high points are smooth.

F-12 Fine
Major elements are still clear but details are worn away.

VG-8 Very Good
Major design elements, letters and numerals are worn but clear.

G-4 Good
Major design elements are outlined but details are gone, for some series the date may not be sharp and the rim may not be complete.

AG-3 About Good
Heavily worn, rims worn down into the lettering, date may be barely discernible.

Coins more worn than AG are not considered collectible except for extremely rare issues, two additional grades are nevertheless used to characterize them.

FAIR,  FAIR-2,  F-2
A coin that is heavily worn which is identifiable as to the type, with a few scattered letters or perhaps one or two date numerals visible, but not necessarily identifiable by date or mint mark variety.

POOR,  POOR-1,  P-1
Filler or cull,  A coin which is worn so smooth it is barely identifiable as to type, Most of the lettering, numerals, etc.  are worn away.

While not included in the ANA standards, intermediate grades like  AU-53, VF-35, F-15, VG-10, VG-9 and G-6 are used by some dealers and grading services. When a grader believes a coin is better than the minimum requirements but not nice enough for the next higher grade, a Plus (+) may be included (VG+) or a range may be given (F-VF).

Split grades are often advertised in order to more accurately describe a coin. In Mint State coins it is not uncommon to find more bag marks on one side then the other. A coin may have a near perfect obverse grading MS-69 but grade only MS-65 on the reverse. When obverse and reverse grades differ, it is customary to note this by a slash mark (/) as in MS-69/65. The overall grade is normally determined by the obverse, but an intermediate value may be appropriate when the difference is significant, especially if the reverse is lower.

A coin graded MS-60/61 would be considered to have an overall grade of MS-60, and another at MS-65/63 could be considered to have an overall grade of MS-64.

Its not uncommon to have split grades among circulated coins for example. A coin can be struck with a high protective rim on the obverse and a low rim on the reverse, a situation which causes the reverse to wear more quickly.

A coin described as Good to Very Good (G-4/VG-8) may show evidence of a letter or two of "LIBERTY" if that is the diagnostic grading feature but not the total of three letters necessary to call it Very Good.