Grading is the single most important factor in determining a banknote's value. Two notes of the same type and year can differ by hundreds — or thousands — of dollars based purely on condition. Here's what every collector needs to know.
The Standard Grading Scale
US paper money is graded on a numeric scale from 1 (Poor) to 70 (Perfect Uncirculated). Most collectors focus on the middle and upper ranges. Here are the grades you'll encounter most often:
- ✦Poor (P-1) — Barely identifiable. Heavy wear, possible tears or missing pieces.
- ✦Good (G-4/6) — Heavily worn. All major design elements visible but faint.
- ✦Very Good (VG-8/10) — Well circulated, some crispness remaining. Margins may be ragged.
- ✦Fine (F-12/15) — Moderate wear with some original detail. Light soiling possible.
- ✦Very Fine (VF-20 to 35) — Light to moderate wear on high points. Some original crispness. May have folds.
- ✦Extremely Fine (EF/XF-40/45) — Minimal wear, sharp details, only the lightest fold traces.
- ✦About Uncirculated (AU-50/55/58) — Nearly perfect. Slight handling or counting crease only.
- ✦Uncirculated (MS/CU-60 to 70) — No circulation wear whatsoever. The higher the number, the better the eye appeal.
What EPQ and PPQ Mean
Third-party graders sometimes append EPQ (Exceptional Paper Quality) or PPQ (Premium Paper Quality) to a grade. These designations indicate the note has outstanding originality — no cleaning, pressing, or repairs — and superior paper quality for its age. An EPQ note is worth considerably more than the same grade without the designation. When buying graded notes, always look for EPQ or PPQ.
The Biggest Grading Mistakes Beginners Make
Inexperienced collectors often overgrade their notes. The most common errors:
- ✦Confusing original crispness with Uncirculated condition — a crisp note can still be circulated.
- ✦Missing light folds that disqualify a note from AU or higher.
- ✦Ignoring the back of the note — graders examine both sides equally.
- ✦Overlooking pinholes, stains, or small tears that dramatically lower the grade.
- ✦Cleaning a note to make it look better — this destroys value and is easily detected by professionals.
Grading Subjectivity
Even expert graders sometimes disagree on a note. Third-party grading services (PMG, PCGS) provide the most objective and universally respected grades. If you plan to buy or sell high-value notes, having them professionally graded removes all subjectivity from the transaction and significantly improves marketability.