The world of coin collecting can be a little confusing to first-timers, and one of the most confusing aspects relates to coin grading and certification. Whether a coin is certified or not does not have any impact on its quality, but it does mean that its quality has been verified by an official organization.

Understanding The Grading System

The Sheldon Coin Grading Scale has been used, in one form or another, to grade coins for more than 60 years. In the modern age — particularly in the United States — we use a similar scale that was adapted from the Sheldon Coin Grading Scale and was created by the American Numismatic Association. This scale has strict specifications regarding the quality of a coin, with three main sections covering whether a coin is of circulated, uncirculated or proof quality, and with many smaller grades that categorize those coins based on number of scuff-marks, extent of discoloration, and other characteristics.

This scale can be used by anyone advertising a coin for sale. The grading system is freely available, and if you have a magnification tool on hand and are prepared to study the coin and the scale, then you can determine what grade a coin should be given. But therein lies the problem, because dishonesty and carelessness on behalf of the dealer can mean that it’s possible to buy a coin in a worse condition than stated, which in turn may mean that you’re paying more than it’s worth.

To counteract this, there are official coin-grading organizations out there. They hire numismatic experts who study your coins, supply them with official grades, and allow you to use the term “certified coin” as a result. These coins usually come encased in a protective slab, on which you will see details of the coin, as well as its grade and a unique serial number that allows you to verify that it was officially graded.

Coin Grading Companies

So, if you want a coin to be given an official grade, without any bias on behalf of a dealer, then you can’t go much wrong with a coin grading company. In theory, your coin will be given an exact and deserving grade, and one that could help to boost its value. But in practice, that is rarely the case.

These companies operate on a very different set of principles and requirements, which means that the same coin graded by three different companies, could very easily return three different grades. This coin will still be classed as a “certified coin”, it will still have an official grade and that grade will still be arrived at fairly, but that grade could be higher or lower depending on who grades it.

Fortunately, the market is well aware of these discrepancies and has adapted accordingly. As a result, a coin with a high grade from a company known to have strict requirements will attract a higher premium than one graded by a company with an opposing reputation.

These are the companies that dominate this industry:

•         PCGS (Professional Coin Grading Service): Generally considered to be one of the best, the grading services provided by the PCGS are well respected in this industry and usually carry a high premium as a result. They offer grading services to clients worldwide, with a faster turnaround time for those based in the United States. The PCGS have been known to be inconsistent with their grading in the past, but the same can be said for many other grading services.
•         ANACS (American Numismatic Association Certification Service): Established back in 1972, this is the oldest coin grading service in the United States. They were created by the ANA, one of the most respected names in US numismatics, but their grading doesn’t attract as much of a premium and is therefore not used as much as some of the other names on this list.
•         NGC (Numismatic Guaranty Corporation of America): A superior service, and one of the most popular services worldwide. Their fees are based on the value of the coin, which makes them a viable option if you have a relatively low-value coin that you need grading.
•         ICG (Independent Coin Grading Company): The ICG have been criticized in the past for being too liberal with their higher grades, but they are still a highly respected service. They are renowned for their ability to detect coins that are counterfeit or have been altered in some way, and they use state-of-the-art slabs (the coin’s protective packaging) designed to reduce damage and toning.

There are many other services as well, including ones that specialize in ancient coins, counterfeit coins and extremely rare coins. But the names mentioned above are generally considered to be the biggest and the best. They should be able to grade all types of coin.

What Is A First Strike Coin?

This is a term you might see a lot of, and one that is there to impress, but there is no standard definition of a “first strike” coin. The assumed definition, at least as far as many investors are concerned, is that a “first strike” coin is one of just a few coins struck from a new set of dies. However, some mints refer to the first few hundred coins as “first strike” coins, so this is a definition that you should not take on face value.

Although the term “first strike” is closely connected to coins produced by the US Mint, the US Mint has no official first strike program. You will struggle to find this grade on a PCGS certified coin,  but they are more common on NGC coins, where the definition changes again. To the NGC, a “first strike” coin is defined as one that has been shipped from the US Mint within 30 days of the coin’s release.