This is the how-to guide on grading the condition of rare and collectible currency. Presented by: Heritage Auctions is the largest collectibles auctioneer and third largest auction house in the world. We are also the undisputed Internet leader in our field. Our 684,824 registered online bidder-members are a testament to the usefulness of our website, our reputation for professional business practices and our vast expertise in the field of art and collectibles. Heritage Auctions, established in 1976, offers a wide range of US & World Coins, Rare Currency, Fine & Decorative Art, Western Art, Illustration Art, Vintage Comic Books & Comic Art, Movie Posters, Entertainment Memorabilia, Jewelry & Timepieces, Vintage & Couture Handbags, Sports Collectibles, Historical & Political Memorabilia, Rare Books & Manuscripts, American Indian Art, Air & Space Memorabilia, Civil War Memorabilia, Vintage & Contemporary Photography, Natural History Specimens and more. We give our customers unprecedented access to our services using the latest advancements in technology and by maintaining a strong presence in the collectibles community. Our knowledgeable staff of over 100 experts and 300 additional service-oriented professionals, and our suite of services, help our customers develop the best collections possible. We are always looking to acquire interesting items, whether through consignment or by outright purchase, and we spend or disburse millions of dollars every business day, on average, keeping our clients' demands satisfied.

1. Currency Grading Tutorial
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2. Currency Grading Tutorial
View grading tutorials for coins and other collectible types
Superb Gem Crisp Uncirculated (or Superb Gem CU): A flawless note, visually perfect in every way. No
folds, bends, rounded corners, or counting crinkles are permissible at this grade level, and the centering must be
superior for the issue. The paper will be crisp and original, the embossing (where applicable) must be bold, and
all four corners must also be perfectly sharp. The overall aesthetic quality at this grade level should be
outstanding for the issue. Notes in this grade are rare, even in the most common series.
Gem Crisp Uncirculated (or Gem CU): A crisp, perfectly centered example that has perhaps one tiny flaw
that limits the grade-perhaps a microscopically frayed corner, or an almost imperceptible crinkle in the paper.
The note must be absolutely original, with bold embossing and bright colors. Any flaw that is readily evident,
such as a noticeable counting crinkle or slightly imperfect centering, will prevent a note from receiving a Gem
CU grade. Notes in this and any Uncirculated grade will, of course, have absolutely no folds or bends.
Choice-Gem Crisp Uncirculated (or Choice-Gem CU): This is an intermediate grade that is reserved for
notes that are nicer than a typical Choice CU note, but have one or more minor flaws that just barely prevent a
Gem CU rating. Such a note might have perfect centering and otherwise flawless paper quality, but a minor
counting crinkle would prevent a Gem grade. An otherwise flawless note with slightly imperfect centering
might also fall into this category. Notes in this and any Uncirculated grade will, of course, have absolutely no
folds or bends.
Choice Crisp Uncirculated (or Choice CU): A note in this grade will be a strictly Uncirculated note, with no
folds or bends present even under close scrutiny. The paper quality and eye appeal will be 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 cannot attain this grade. A counting crinkle or two is
acceptable, as well as a microscopically frayed corner or two. Any combination of these or other problems
would drop a note into a lower category. A Choice CU note should be a pleasing, original example with no
major distractions that are readily apparent.
Crisp Uncirculated (or CU): A note in this grade must be strictly Uncirculated-with no folds, bends, or
wrinkles present, even when viewed very closely under a strong light. A bent corner tip may be acceptable at
this grade level if there are no other flaws, but only if the bend is within the margin and it does not affect the
design. If the bend is large or there is more than one, the note cannot grade CU. Such a note may have centering
problems, counting crinkles, or microscopically rounded corners, but the note must be strictly free of folds or
bends. A note that is otherwise Choice or Gem CU but has been processed or pressed might fall into this
category.
Choice Almost Uncirculated (or Choice AU): A note in this grade will be a "just miss" for a Choice CU grade
or higher. It will have above average eye appeal and will be attractive for the issue, but a bent corner or light
vertical centerfold 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

3. drop the note into a lower grade classification.
Almost Uncirculated (or AU): An AU note will have one or more light folds that are not heavy in nature or
obtrusive to the overall appearance. Three light vertical bends would be acceptable for this grade if they do not
"break" the surface of the paper, but no more than two light folds may be present. One heavy fold or crease may
be present at this grade, but two heavy folds or creases will drop the note to a lower grade level.
Extremely Fine (or XF): A note in this grade will be bright, fresh, crisp, and attractive, but a few light folds or
bends may be present. The overall eye appeal will be above average, and only the slightest soiling may be
visible. A note in this grade might have a few light folds or several very minor bends, or a couple of vertical
creases may be present. A note with a horizontal fold and three vertical folds cannot technically grade XF,
although a very light horizontal bend that does not "break" the surface of the paper might be acceptable at this
grade level if the three vertical folds are not heavy and there are no other apparent flaws. A typical XF note may
have a couple of pinholes, but any larger holes would prevent a note from reaching this grade level.
Very Fine (or VF): A VF note should have nearly full remaining crispness, although several folds, wrinkles, or
other signs of circulation may be present. Mild soiling might be apparent, but it should not be serious. 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 level, but the paper should retain nearly full crispness and there should be no loss of color
in the design.
Fine (or F): A note in this grade will resemble most notes that have spent considerable time in circulation. The
piece will have lost some of its crispness, but the paper will still be solid. (A limp note without any crispness
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.
Very Good (or VG): At this grade classification, a note will be heavily worn with slightly rounded corners,
frayed edges, or slightly rough margins. The paper will be intact, however, and no large pieces may be missing.
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.
Good (or G): A note in this grade will be heavily worn, soiled, torn, taped, holed, or missing small pieces from
the design. It will still be roughly intact, and readily distinguishable by series and design type. Damage or wear
may be rather severe, but any note that is missing large portions of the design or is barely attributable may fall
into an even lower grade classification, such as Fair or Poor.
A brief comment about intermediate grades
Intermediate grades such as XF-AU, VF-XF, Fine-VF, VG-Fine, or Good-VG are often used to indicate a note
that is nicer than the lower grade level, but just misses the higher classification. For example, a note with three
vertical folds and a horizontal fold cannot technically grade XF, but it might be much nicer than a typical VF-an
intermediate grade of VF-XF is then used in this instance. A plus sign (+) may also be occasionally affixed to a
grade, indicating that the note is a nice, problem-free note for the assigned grade with claims to a higher
classification.
Processed, washed, and pressed notes
It is an unfortunate aspect of our hobby that unscrupulous people will attempt to pass some things off as
something they are not. Methods to "improve" the look or grade of a note abound, and it is common to see notes

4. where any number of these methods have been attempted. The most common is to wash the note (usually with
soap, detergent, or bleach) and flatten it (often with an iron), and starch is even sometimes added to stiffen the
note and add crispness. While a beginning collector may be easily fooled by such a note (and even experts
occasionally miss one), enough practice will enable any collector to readily spot a "doctored" note. A few
people in the hobby still maintain that a processed note is an "improved" note, but the portion of the hobby that
views originality favorably has gradually overwhelmed this view, and processed notes are usually traded at a
discount and graded at a level or two lower than their apparent grade. A processed note can usually be detected
by fading or loss of color, especially where the note was once folded. Folds can often be difficult to detect, but
the evidence of a fold can never be completely removed. Sometimes even the smell of a note is a dead
giveaway-and sometimes it may be the only way to determine if a particularly good job was done in processing
a note. On an Uncirculated note, a lack of original embossing is a telltale sign of a pressed note. Patience and
attention to detail can often prevent hundreds or even thousands of dollars worth of mistakes.
Damaged and repaired notes
Some common sense is necessary when grading damaged or repaired notes. A collector should research the
different methods of repairing a note, and be able to recognize these methods. Sometimes it is actually possible
to "improve" the appearance of a note by repairing or restoring the paper (particularly when a tear is closed or a
missing piece is restored), but the note still must be classified as damaged and repaired, and special care should
be taken to make sure any note does not have a subtle or imperceptible repair. Some repairs are deceptive, and
whether this deception is done intentionally or not a collector can get "burned" on such a note. The assigning of
a grade to a damaged or repaired note is a matter of opinion in some sense, but common sense should dictate the
final evaluation. A general rule to follow is to consider at what level one would be indifferent to a damaged note
as opposed to a problem-free note in a lower grade. For example, if a collector would be equally content with a
stained CU note or a problem-free VF, then a fair classification of the stained CU note might be at the VF grade
level. At Heritage, we will give an overall grade to a note, and then describe the paper quality of the note and
the flaws that are present. For example, a note may be graded VG, but in the catalog description of the note it
might state that it has the paper quality of a VF but a corner tip has been torn off.
Some general comments about grading and value
Grading is, of course, an art, and not a science. While counting folds is relatively easy, determining eye appeal
and what a note in a certain grade should "look" like takes time, experience, patience, practice, and a certain
level of common sense. If a note looks really nice and might pass for AU but is technically only an XF or XF-
AU, it will often bring a price commensurate with an AU grade regardless of the technical grade. Eye appeal is
often more important than a technical grade in determining a note's value. This only makes sense-most people
would rather own an attractive, problem-free, well centered AU note with a vertical fold down the center rather
than a generally unattractive note that technically merits a CU grade. Approach grading with common sense and
knowledge about what merits a given grade, and have fun-which is, after all, the most important aspect of
collecting.
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