First, a coin is purchased in its “raw” state by a trained numismatist. At this stage the risk of financial loss is greatest.

Next, the coin is sent to the Numismatic Guaranty Corporation, an independent non-biased entity, which “certifies” its grade and authenticity for the entire market.

Finally, the graded coin is sonically sealed in a hard plastic tamper-proof holder. This eliminates potential bias with respect to a coin’s grade. At this stage a novice can attach a value without the aid of a trained numismatist.

Rarity and condition are key elements in establishing the value of a coin. Rarity is easy to establish, as there is widespread agreement on the rarity of most coins. Evaluating condition is more of a challenge. In the early years of coin collecting, three general terms were used to describe a coin’s grade:

• Good: Details were visible but circulation had worn the surface
• Fine: Details were less worn from circulation and a bit of the mint luster showed
• Uncirculated: Details were sharp and there was a luster approaching the state of the coin at the mint, prior to general circulation

As the collector market for coins grew rapidly in the late 1800s and early 1900s, it became apparent that a more precise grading standard was needed. Some coins were simply more fine than others, and some uncirculated coins showed more luster and far fewer marks than others. Terms like “gem uncirculated” and “very fine” began to see use, as more precise grading descriptions allowed for more precise pricing for the booming collector market.

In 1948, a well-known numismatist by the name of Dr. William Sheldon attempted to standardize coin grading by proposing what is now known as the Sheldon Scale. His scale, which runs from one to 70, was originally devised specifically for large cents, but it is now applied to all series. The Sheldon Scale was a vast improvement over grades such as Good and Fine, but there was still substantial room for disagreement among two parties based on subjective opinion.

For a buyer with an untrained eye, this was a problem. If you were unable to distinguish between an MS 63 and MS 65 coin, you were at the mercy of the seller who established the grade. Even a one-point difference in grade could mean hundreds or even thousands of dollars difference in value. With so much riding on opinions that varied widely, it was difficult for collectors to justify purchasing coins of any significant value.

In 1987, coin grading was raised to a new level of consistency with the founding of Numismatic Guaranty Corporation (NGC). NGC’s unique approach is to have each coin evaluated by a minimum of three full-time grading experts with decades of experience. The graded coin is designated with its NGC grade, attribution and registration number, and is then sonically sealed in NGC’s secured holder, providing protection and easy storage.

NGC-certified coins offer guaranteed authenticity and grading expertise so that collectors may buy and sell even the most expensive coins with greater confidence.