Clay Irving Collection - Grading Notes

Grading Paper Money

Grading paper money is a subjective art — It is mix of technical and asthetics, and the final assessment is an individual's own opinion. Some of the many grades commonly seen are presented below. Professional third-party grading services use a slightly modified version of the Seldon Scale developed by Dr. William Sheldon in 1949 — It is a scale of 1 to 70 with 70 being a "Perfect New" note and "1" being a really poor note.

Grade Variations
Instead of the 1 to 70 scale that professional third-party grading services use, some people (including IBNS) use a descriptive scale:

Uncirculated (UNC) — You'll also see Crisp Uncirculated (CU)
About Uncirculated (AU)
Extremely Fine (XF)
Very Fine (VF)
Fine (F)
Very Good (VG)
Good (G)
Fair
Poor

Some people will split grades when grading a note — For example, VG-F means the note is graded between "very good" and "fine".

Some people will use a plus sign, "+", to designate that the grade is slightly above a grade, but not quite to the next grade. For example, if a note should be classified between XF and AU, it can be given a grade of XF+ or XF++. A note with a grade of XF+ should be located in the middle of XF and AU on a graduated line while a note with a grade of XF++ should be very near the AU boundary mark.

Additional Terminology for Paper Quality

EPQ — PMG uses the designation Exceptional Paper Quality (EPQ) for notes that, in the opinion of PMG graders, are original. By original, they mean that a note has not been physically, chemically, or materially processed to lend the appearance of a higher grade. PMG graders examine the embossing, inks, and overall integrity of each note to make the determination whether it will qualify for EPQ. Notes exhibiting normal wear-and-tear for their respective grades are eligible; normal wear may include factors affecting grade such as counting marks and folds. Notes receiving the EPQ designation must furthermore be unrestored. A restored note has had non-original material added to bring its appearance to a known or assumed state. For currency to grade Gem Uncirculated 65 or higher, it must also receive the EPQ designation.
PMG indicates that typically 30 is the lowest grade that they will give and EPQ designation. However, they have had a limited amount of notes that they designated 25EPQ.
PPQ — PCGS affixes a "PPQ" (Premium Paper Quality) designation to the grade (e.g., "Gem New 65PPQ"). These are notes that bear no visible evidence of restoration and that retain all signs of fully original paper quality, such as paper wave, embossing, and bold ink color and eye appeal, and that also have above average paper for the grade that is free of defects such as tears, pinholes, or other problems. This is not done to penalize those notes that are not fully original, as many are very collectible and highly valuable. Instead, this system is designed to reward those notes, both circulated and New, that possess premium paper quality and complete originality. It should be understood that even though a note may be fully original and free of any restoration, it still might not qualify for the "PPQ" designation.
PCGS has graded a note as low as 20 with a PPQ designation.
Counting Marks — Very light bends going into the note that aren't folds.
Embossing — When the note's printing can be felt on the other side of the note (especially around the serial numbers and treasury seal).
Handling — Minor disturbances in the paper other than folds such as teller counting marks, crinkles and minor bends.
Net — PMG defines a "net graded" note is one which has had an adverse occurrence after it left the BEP. PMG will specifically state the reason (s) why any note is net graded. The PMG guarantee is not valid on any net graded note. A few reasons why a note may be "net graded" are tear, corner missing, repaired, re-embossed, washed, stained, rust, ink or writing, and PVC damage.
Original — Paper quality is as issued except for normal circulation.
Paper Wave — The light ripples that should go across the top and bottom of a note, this is a result of wet paper drying after the printing process.
Pedigree — The "pedigree" field on the label of a certified note may be used to indicate the collection name but it is not specifically designated for highlighted collections typically referred to as "pedigrees." Many collectors like to have their names tied to their collections and, while this is allowed, not just anything may be put on the label / holder. It should also be noted that although this field may add value to certain notes, it is not the primary purpose of the field.
Pinches — Similar to counting marks but they occur internally on the note.
Registration — Alignment of the face and back printing.
Smudges — The result of skin contact to ink surfaces.

Grades

Perfect New 70
The "70" grade is essentially a perfect note. The note will be entirely original, with broad, perfectly even margins on all four sides, sharp corners, bright colors, outstanding eye appeal, and literally perfect paper quality with no trace of even the smallest fault. Perhaps only the most modern notes will attain this grade, and even then it will be a rare occurrence. [ PCGS Grade ]
→ PMG grades its first 70
Superb Gem New 69
A "69" will be nearly as perfect as a "70", but some very minor fault such as a barely measurable imperfection in the centering or a tiny, almost unnoticeable crinkle in the paper will keep such a note from absolute perfection. [ PCGS Grade ]
Superb Gem New 68
A "68" is basically as nice and as close to perfection as a "69", but a minor fault may be present, including a tiny handling mark, an edge bump, or a very small counting crinkle. Otherwise, a "68" will be flawless, with excellent centering, bold colors, excellent eye appeal, and full originality. Despite the mention here of trivial flaws, one should remember that a "68" is an essentially perfect note. It is the highest grade that can reasonably be expected for many series, including most large size type notes. [ PCGS Grade ]
Superb Gem New 67
A "67" will be the highest possible grade for many series, as even most essentially perfect notes will sometimes reveal a minor fault upon close examination. A "67" should have broad margins for the issue, with centering that is nearly perfect to the naked eye. The colors and eye appeal should be bold and attractive, and the originality should be unquestionable. Bold embossing (where applicable) must be evident. One or more tiny handling marks may be present, an edge or corner bump may be noted, or there may be a tiny counting crinkle evident, but any fault that is distracting to the naked eye or that detracts from the overall appearance will prohibit a note from attaining the Superb grade. [ PCGS Grade ]
Superb Crisp Uncirculated - 67
A nearly flawless Note with perfect centering. Full wide margins all around. Colors are total bright, crisp and vibrant. The quality of the note is perfect.
Gem New 66
This grade level signifies a note that is superior to an "average" Gem note, but that can't quite reach the Superb level because of some minor fault such as a counting crinkle, handling mark, or corner bump. A "66" may have terrific centering but just not the broad margins of a Superb grade, or it may be a broadly margined example that is just a tiny bit off center. A "66" should retain full originality, although the embossing may not be quite as strong as on a Superb Gem. The colors and eye appeal should still be well above average. [ PCGS Grade ]
Gem New 65
A Gem note is one that at first glance appears perfect. After examination, however, one or more minor faults may be noticed that keep the note from attaining a higher grade. Such minor faults may include a counting crinkle, minor edge handling, faint handling marks or finger smudges, or very minor rounding of the corners. The centering should be well above average, although minor imperfections in the centering are permissible if the margins are broad. Embossing may or may not be present, but notes at this grade level will not receive the "PPQ" label if they are not fully original. An otherwise Superb note that has been pressed or is flat with no embossing may receive a "65" grade without the "PPQ" modifier. Notes in this and any New grade will, of course, have absolutely no folds or bends. It should be stressed that although notes at this grade will (by definition) be less than perfect, they will still be above average notes that may appear to the average viewer to be pristine. [ PCGS Grade ]
Gem Crisp Uncirculated 65
An almost perfect Note. Better than average margins. No aging or fading.
Very Choice New 64
"64" is an intermediate grade reserved for notes that are better than Choice New but that don't quite reach the Gem grade. Such notes may have minor faults such as a couple of unobtrusive counting marks, ink or handling smudges, a single pinhole, or a rounded corner tip. The centering or margins will be better than average but may fall just short of that required for the Gem grade. It will still be an above average note, should have good eye appeal, and should not have any major blemishes or faults that are readily evident. A note at this grade level that receives the "PPQ" designation will likely have margins or centering that are slightly narrow or off center, but will possess complete originality. [ PCGS Grade ]
Very Choice Crisp Uncirculated 64
A bright Note that's slightly below Gem quality. margins and color are above average. A Note that may have slight centering problems.
Choice New 63
A Choice note will be strictly New, with no folds or bends that indicate circulation. The paper quality and eye appeal will be slightly above average for the issue, and any flaws present will be minor in nature. Imperfect centering is acceptable at this grade level, although any note with severe centering problems (with the design of the note touching the edge at one or more margins) cannot attain this grade. Counting crinkles or handling marks are acceptable, as is a frayed corner or two. One or two pinholes may be present. No folds or bends may reach into the design of the paper, although a light corner bend that does not extend into the design may be present. A note that otherwise appears Gem New but has flat paper surfaces may merit this grade. Complete originality is again required for the "PPQ" designation, although at this grade level some other problem such as poor centering or minor handling will be present. [ PCGS Grade ]

The note below grades "APPARENT Choice New 63" because it is stained.
Choice Uncirculated 63
Original but margins are “tight” on one or two sides. Good eye appeal. [ PMG Grade ]
Choice Crisp Uncirculated 63
A nice new Note but not quite Gem. Centering may be a little off. May show some aging or light counting smudges or wrinkles.
UNC CU— Uncirculated, Choice Uncirculated
A perfectly preserved specimen; no mishandling. Paper is clean and firm; no discoloration or marks. Corners are sharp-no rounding. The surface has a natural sheen.
AU — About Uncirculated, Choice AU, AU/UNC
Virtually perfect; may have evidence of mishandling; or slight bank-counting folds either at a corner or in the center-not both! Paper is clean and bright with sharp corners and original sheen. No hard creases.
New 62
A note at this grade level will remain fully New with no folds or bends, but a couple of corner folds that do not reach into the design may be present. Counting crinkles and handling marks are acceptable, as long as they are not overly distracting. A partial bend or pinch that does not extend through the entire width of the note may cause it to be designated a "62" or lower. A note with severe centering problems may fall into this grade, as may notes with flat paper surfaces or minor paper toning. [ PCGS Grade ]
New 61
Most notes that fall into this grade will do so because of a combination of faults, some of which may be severe. Corner folds (not into the design) may be present, as may signs of paper toning, handling, counting marks, smudges, pinholes, or other problems. A "61" will typically either be poorly centered with other minor faults, or will be a technically New note with no folds but that has a combination of minor faults that prevent a higher grade. [ PCGS Grade ]
Crisp Uncirculated 60
No trace of circulation. Can have centering problems, pin holes, counting smudges, wrinkles, close margins, or a corner tip fold (not into designs).
About Uncirculated 60
Almost new. These will be much the same as a new Note except for a single fold or several corner folds.
New 60
A "60" note will remain strictly uncirculated with absolutely no folds or bends that extend into the design. Notes at this grade level typically will have one or more significant faults that detract from the note's appearance, such as slight loss of color, paper toning, minor foxing, two or more corner folds, flat and lifeless paper, pinholes, or a small staining spot or two. Any note with a major problem will be placed into a PCGS Currency "Apparent" grade holder with the problem described. A note in this grade will be generally unattractive, although it will technically be New or "uncirculated". [ PCGS Grade ]
Choice About New 58
A Choice About New 58 note will typically be an apparent Choice New or better note, with one or two light corner bends or folds that reach into the design of the note. A light vertical bend down the middle of an otherwise Choice New or better note would also qualify a note for this grade. [ PCGS Grade ]
Choice About Uncirculated 58
Often a note with a single fold that has been pressed or re-embossed to hide the fold. [ PMG Grade ]
Choice About New 55
A note in this grade will appear New at first glance, but will have a bent corner or light vertical center fold that 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. [ PCGS Grade ]
About New 53
"53" is an intermediate grade used for notes that are above average for the "50" grade but that don't quite reach the "55" grade. Such a note might have one slightly heavier fold or crease but with all the other qualities of an uncirculated note, or it might have a combination of light bends or corner folds that keeps it from a higher About New grade. [ PCGS Grade ]
About New 50
An About New 50 note will display one or more light folds that are not heavy in nature or that do not detract from the overall appearance, two or three very light vertical bends if they do not break the surface of the paper, or one heavy fold or crease. Two heavy folds or creases will drop the note to a lower grade level. [ PCGS Grade ]
Choice Extremely Fine 45
Many of the same qualities as above, but note is not original. Common alterations include attempts to diminish the appearance of folds. [ PMG Grade ]
Extremely Fine 45
A note in this grade will typically be bright, fresh, crisp, and attractive, but a few light folds, several light bends, or a couple of vertical creases may be present. The overall eye appeal will be above average, and only the slightest soiling may be visible. [ PCGS Grade ]

The note below grades "APPARENT Extremely Fine 45" because there are stains on the back of the note.
Extremely Fine 40
The old standard of "three folds makes an XF" is applicable here, as typically a thrice-folded note does indeed usually grade "40". Common sense exceptions must be made, however, as three folds that are exceptionally heavy may drop the note into a lower grade category. Notes with three folds and a couple of other minor light bends or folds may occasionally make it to the "40" grade if the extra folds are light enough and are not obtrusive to the overall appearance. A typical XF note may have a couple of pinholes, but any larger holes would prevent a note from reaching this grade. [ PCGS Grade ]

Three folds, one of which may be horizontal. Little, if any, circulation.[ PMG Grade ]
EF — Extra Fine, Choice EF, Choice XF, XF
Very attractive with evidence of light handling. May have 3 light folds or 1 hard crease. Paper is clean and bright with some original sheen. Corners may be soft or beginning to round and may have evidence of wear in a crease.
Choice Very Fine 35
For years dealers and collectors called this grade “VF-XF.” This note looks Extremely Fine, but may have four to five light folds. Original examples (EPQ) will usually be attractive with little actual circulation. [ PMG Grade ]
Very Fine 35
This is a "just miss" grade, comparable to the grade "About Extremely Fine" used by some companies. It represents a note that is very close to an Extremely Fine 40 but that has one or two minor faults, such as an additional light fold or two that preclude a higher grade. A "35" should have eye appeal that is well above average for a VF note. [ PCGS Grade ]
Very Fine 30
One or two extra folds on an otherwise Extremely Fine note would lower an example to this grade level. The paper should remain nearly fully bright, and it should retain strong crispness. A "30" will retain good color and eye appeal and should have no more than a few scattered pinholes. [ PCGS Grade ]

Still crisp, but may show a bit of circulation or light soiling. May have several light folds. [ PMG Grade ]
Very Fine 25
A "25" is basically a "20" that for some reason appears slightly nicer than average or has some (but not enough) claim to a Very Fine 30 grade. A "25" will typically have bright, solid paper with some signs of light handling or circulation, and it may have more folds than are allowed for a higher grade. [ PCGS Grade ]

Any note with a major problem will be placed into a PCGS Currency "Apparent" grade holder with the problem described. For example, the note below has been washed.
Very Fine 20
A Very Fine 20 note should have plenty of body remaining in the paper, although numerous folds, wrinkles, or other signs of circulation may be present. Mild soiling might be apparent, but it should not be serious. The paper should remain relatively bright. 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 frayed or slightly rounded at this grade, but the paper should retain nearly full crispness and there should be little or no loss of color in the design. [ PCGS Grade ]

Moderate circulation with numerous folds, mild soiling but no serious detractions. A solid note but may have a minor defect. [ PMG Grade ]
VF — Very Fine
Attractive note with evidence of more handling and wear. May have several folds both vertically and horizontally. Paper is relative crisp and may have minimal dirt or color smudges. Corners are rounded and edges show wear. There can be no tears.
Choice Fine 15
Looks like a Very Fine, but may have too many folds or too much circulation to warrant a full Very Fine. [ PMG Grade ]
Fine 15
This intermediate grade represents a note that has some qualities of a VF note, such as good body or soundness of paper, bright colors or inks, or above average eye appeal, but that possesses too many folds or too much evidence of circulation to grade Very Fine 20. This is a rather common intermediate grade, and will often be awarded to a Fine example that is above average in some respects or to a note that just misses the VF grade because of an isolated loss of body at a fold. [ PCGS Grade ]

The note below grades "APPARENT Fine 15" because an edge tear was repaired with tape.
Fine 12
A note in this grade will resemble most notes that have spent considerable time in circulation. The piece will have lost some of its body, but the paper will still be solid. (A limp note will 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 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. [ PCGS Grade ]
F — Fine
Has evidence of considerable circulation-many folds, creases or wrinkling. No center holes. May be slightly dirty; color is not bright, but clear. Edges are worn and paper is beginning to get soft. May have some tears, but cannot go into the border design. One or two pin holes or staple holes are acceptable. The overall appearance is still desirable.
Very Good 10
Another intermediate grade that designates an above average VG or a "just miss" note that nearly reaches the Fine grade. A Very Good 10 might often be an otherwise Fine example that has a heavy fold or two with isolated soiling or worn areas around it. [ PCGS Grade ]
A solid, whole note with lots of circulation. Too limp or too many minor problems to make a fine grade. [ PMG Grade ]

The note below grades "Apparent Very Good 10" because it has edge tears.
Very Good 8
At this grade, a note will be heavily worn with slightly rounded corners, frayed edges, or slightly rough margins. The paper will be intact, however, and no pieces may be missing other than an occasional corner tip. 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. [ PCGS Grade ]
VG — Very Good
Well used but still intact. Corners are rounded; nicks, tears, and foxing can extend into the main design. Discoloration and staining may be present. May have center-holes from excessive folding. Paper is very soft. No missing pieces.
Good 6
This grade will be assigned when a note has some feature that prevents the full VG grade, such as heavy wear, a small missing piece from the edge or a small internal hole, or if there is some combination of minor damage or staining that prevents the Very Good 8 grade from being assigned. [ PCGS Grade ]
Good 4
A "Good" note is actually not all that good, as it will be basically intact but fully limp and lacking in any color, snap, or eye appeal. The colors will have typically faded, and there may be small edge chips, nicks, margin tears, or other problems. Any note with major problems will either fall into an even lower grade or will be given an "Apparent" grade with the problems noted. [ PCGS Grade ]
Very heavily circulated note with numerous small problems. Totally limp with impaired visual appeal. Commonly seen with small pieces missing. [ PMG Grade ]

PMG indicates that grades under 4 Good are generally not collectible unless the note is rare. Most notes at these grade levels are "Net" graded due to major problems.
G — Good
Well worn and heavily used. Strong multiple folds and creases; may have multiple pin holes or center-holes, heavy stains or discoloration. Edges are heavily worn with rips and tears into the main design. Paper very limp.
About Good 3
An About Good 3 note will typically be extremely worn and may be missing small pieces. If any major damage is evident or there are significant portions of the note missing, a lower grade will be in order. [ PCGS Grade ]
Fair 2
A note in this grade should be mostly intact, but large pieces may be missing including some in meaningful portions of the design. Holes, stains, tears, splits, and other problems will likely be present. [ PCGS Grade ]
FAIR — Fair
Similar to good, but totally limp and very dirty. Portions may be missing or the design obscured.
Poor 1
About all that can be expected at this grade level is that the note is still (mostly) in one piece, although it may not be fully complete. Most notes are not collectible by the time they are this low on the grading spectrum, but some rare notes are still quite valuable even heavily worn and damaged. Most notes at this grade level are likely good candidates for skilled restoration. [ PCGS Grade ]
POOR — Rag, Filler
Similar to good, but severely damaged; may have tape holding pieces together. Edges may be trimmed to hide heavy foxing. Paper in very poor condition.

Grading Chart

	UNC	AU	EF	VF	F	VG	G	Fair	Poor
	Uncirculated	About Uncirculated	Extremely Fine	Very Fine	Fine	Very Good	Good	Fair	Poor
Edges	no counting marks	light counting folds or...	light counting folds	corners are not fully rounded	much handling on edges	rounded edges
Folds	no folds	...or one light fold through center	max. three light folds or one strong crease	several horizontal and vertical folds	many folds and creases
Paper color	paper is clean with bright colors			paper may have minimal dirt or some color smudging, but still crisp	paper is not excessively dirty, but may have some softness	paper may be dirty, discolored or stained	very dirty, discolored and with some writing	very dirty, discolorated, with writing and some obscured portions	very dirty, discolored, with writing and obscured portions
Tears	no tears			no tears into the border	minor tears in the border, but out of design	tears into the design
Holes	no holes				no center hole, but staple hole usual	center hole and staple hole
Integrity	no pieces missing						no large pieces missing	piece missing	piece missing or tape holding pieces together

Grading Services

CGA - Currency Grading & Authentication
Currency Grading and Authentication (CGA), the country's first paper money grading service, was formed in 1998 in response to a high demand from collectors and dealers for an impartial third party grading service.
PCGS Currency
PCGS Currency is the market leader in third-party grading and authentication, grading more than 250,000 notes since founded in 2005.
PMG - Paper Money Guaranty
Paper Money Guaranty (PMG) is the most comprehensive third-party paper money grading and encapsulation service. PMG combines accurate, impartial and knowledgeable paper currency grading professionals with proven processes and standards for the care and evaluation of your notes.

References

Grading Currency
A very good guide to grading currency with many excellent examples!
Grading Guides
Littleton Coin Company has a great guide to grading paper money with excellent examples.