What Factors Affect Grading

The grade a note receives depends on multiple factors related to its condition. Understanding what affects grade helps you assess notes accurately and understand why two notes from the same series might have different grades.

Primary Factors

Folds and Creases

Impact: Severe – This is the most damaging condition problem.

A single fold can dramatically reduce a note's grade:

• A note in AU-50 (About Uncirculated) condition with a single center fold might drop to VF-25 (Very Fine) or even lower
• Multiple folds or heavy creasing can reduce a note from MS-60 (Mint State) to F-12 (Fine) or worse
• Fold patterns affect value differently: horizontal folds in the center are common and expected in circulated notes; unusual fold patterns (diagonal, edge folds) are more notable

Tears and Holes

Impact: Very Severe

Tears reduce grade significantly and are difficult to repair without damage:

• Large tears (affecting 5%+ of the note) can make a note uncollectible
• Small tears in white space are less damaging than tears through design elements
• Holes (punch holes, spike marks from old storage) are very damaging
• A high-grade note with even a small tear is worth significantly less than the same note without the tear

Stains

Impact: Moderate to Severe

Stains reduce the note's appearance and grade:

• Small stains in white space: minimal impact
• Stains over portrait or design: significant impact
• Water damage creating large discolored areas: severe impact
• A VF-35 note with heavy staining might be regraded to VG-8

Ink Smears, Writing, and Markings

Impact: Severe

Any substance applied after printing reduces value significantly:

• Writing or pen marks – Someone wrote on the note. This is damage, not a printing error.
• Stamps or ink stains – Bank stamps or other applied stamps reduce value
• Pencil or marker – Any marking reduces the note's appearance and grade
• Even a casual mark from a pen can reduce a note by 2-3 grades

Edge Wear and Rounding

Impact: Moderate

The edges of circulated notes naturally wear and become rounded:

• VG-10 notes typically have notably rounded edges
• Fine notes have some edge rounding but less than VG
• VF notes have minimal edge wear
• Sharp corners indicate a note has had minimal circulation

Center Wear (High-Point Wear)

Impact: Moderate

The highest relief points of the design (the portrait, numerals, etc.) wear first from handling:

• G-6 notes show noticeable flattening of the portrait from repeated handling
• Fine notes show minimal portrait wear
• VF notes show very light wear only on the highest points
• MS notes show no wear on high points

Color and Toning

Impact: Moderate

The original color of a note affects its grade and appeal:

• Original bright color – Highest appeal for MS grades
• Light toning or aging – Natural darkening or yellowing from age is normal; acceptable in most grades
• Heavy toning or foxing – Brown or red discoloration reduces appeal significantly
• Fading – Some colors fade over time (green ink, in particular)

An MS-64 note with original, bright color is worth more than an MS-64 note with heavy toning.

Centering

Impact: Moderate (mainly for MS grades)

The position of the design within the note borders affects appearance:

• Perfectly centered – The design is equidistant from all edges (ideal)
• Well-centered – Design is centered with only minor variation (excellent)
• Off-center – Design shifts toward one edge, leaving wider margins on the opposite side
• Off-center notes are still fully valid currency but are less attractive to collectors

What Does NOT Affect Grade

Natural Aging and Patina

Gradual color changes from aging are not considered damage. A note that's naturally yellowed or toned from a century of storage doesn't receive a lower grade for this. The aging is part of the note's history.

Original Color Variations

Some notes from the same series have different ink shades due to variations in production. These are not defects and don't affect grade.

Minor Handling Marks in MS Grades

Even MS-60 notes may show very minor handling marks (slight creases that haven't broken fibers, faint contact marks). These are expected and don't indicate the note was circulated.

Common Grading Mistakes

Confusing Light Toning with Staining

Light toning is normal aging; staining is damage. Light toning doesn't significantly reduce grade; staining does.

Overestimating Grade Due to Eye Appeal

A note that's visually attractive might seem higher grade than it actually is. Use the grading scale standards, not just appearance.

Assuming No Damage Means High Grade

A note with no visible damage might still be VF-20 if it has circulation wear throughout. The absence of damage doesn't guarantee a high grade.