It is important to know how to grade coins if you are going to eb a serious collector. Depending how long, and for what reasons you are collecting coins, you may or may not have heard of coin grading, nor understand how to grade coins or how to store and protect your coins. With that said, if you are happy just having some neat old or foreign coins to look at once in awhile you will probably be fine doing just what you currently are, if you are deeply interested in the hobby then you might want to continue reading this informative little article on grading and protecting your coins.
When it comes to coin grading things can sometimes be pretty unclear. In the beginning there were simply two grades for coins; new and used. As the hobby evolved a letter scale for grading was adopted by collectors.
The lowest grade for a coin is basal State, or its letter equivalent PO, followed by Fair (Fr), About or Almost 
Good (AG), Good (G), Very Good (VG), Fine (F), Very Fine (VF), Extra Fine (EF or XF), Almost or About Uncirculated (AU), Uncirculated (Unc), and the highest grade Brilliant or Beautiful Uncirculated (BU). Thankfully there are now quality coin grading services, such as PCGS, who for a small fee, will accept your coin, thoroughly examine it, assign it a grade, and return it for you.
As for protecting your coins there are few different options available to you. You can buy hard plastic protective cases and plastic sheets from any hobby store that deals with coins. Or, if you are inclined to do so, included in many professional grading services is also a hard protective case that protects your coin as well as states its evaluated grade.
Written by Mike Barton for Coin Collector Guide Copyright 2008
It should be noted that different types of coins have different sets of criteria that are used to judge their condition. When learning how to grade coins, as a general rule the more rare a coin is the less stringent the grading criteria is. For example with a coin that is common in high grades, such as the Morgan Dollar, specimens must be in very good shape to rate a Fine. On the other hand, a more rare coin, such as the Liberty Seated Dollar, an example graded Fine would show more wear than a similarly graded Morgan Dollar.
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