How does paper money grading work?
The 70-Point Scale
Most collectors use the Sheldon 1–70 scale, originally created for coins but adapted for paper money. The scale is divided into broad categories: Uncirculated (60–70), About Uncirculated (50–59), Extremely Fine (40–49), Very Fine (20–39), Fine (12–19), Very Good (8–11), Good (4–7), and Fair/Poor (1–3).
Within each category, numbers indicate how close the note is to the next grade. For example, a note graded 65 is a Gem Uncirculated, while a 63 is Choice Uncirculated. The difference often comes down to centering, paper quality, and the number of folds or creases.
What Graders Look For
Graders examine several key factors: paper originality (whether the note has been cleaned or pressed), centering of the design on the paper, corners (sharp vs. rounded), and surface quality (crisp vs. limp). Folds, tears, stains, pinholes, and writing all lower the grade.
For uncirculated notes, the number of folds is critical. A single fold can drop a note from 60 to 50. For circulated notes, the amount of wear, dirt, and damage determines the grade. Third-party services like PMG and PCGS Currency encapsulate notes and assign a grade for a fee.
- Centering: how evenly the design sits on the paper
- Corners: sharp, square corners indicate higher grade
- Folds: even one fold can reduce grade significantly
- Paper quality: crisp, original paper is preferred
- Surface: stains, writing, or pinholes lower grade
Why Grading Matters
Grading affects value dramatically. A note worth $20 in Very Fine might be worth $200 in Uncirculated. For rare notes, the difference between a 65 and a 66 can mean thousands of dollars. That's why professional grading is common for valuable notes.
However, grading is subjective. Different graders may assign slightly different numbers, especially for mid-grade notes. For common notes, the cost of professional grading may not be worth it, so collectors often grade their own notes using reference guides.
Common mistakes
- Thinking a note must be perfect to be valuable—many circulated notes are still highly collectible.
- Assuming all uncirculated notes are equal—centering and eye appeal can vary widely within the same grade.
- Believing that pressing or cleaning a note improves its grade—it usually lowers it because originality is lost.
