How United States Paper Money is Graded
State of preservation is as important for paper money as it is for coins. Paper money is primarily graded to describe the amount of wear, but other factors can influence value. Many of the terms used to describe the grades of paper money are the same as for coins. Of course the physical nature of paper requires a whole different set of definitions. They are briefly described here.
Crisp Uncirculated (CU) - This is a note that is pristine as issued. It is literally crisp, with sharply pointed corners. It must have absolutely no folds, tears, or edge rounding. It can have no stains or staple holes.
Extremely Fine (XF) -This is a particularly nice note with only the slightest sign of wear. It will still be crisp to the touch. Slight rounding of the corner points is possible but no significant folds or creases. No tears, stains or staple holes at all. (A convenient method of detecting creases in a note is to hold the note pointed at a narrow light source and look at it from an acute angle, though not directly in the direction of the light.)
Very Fine (VF) - This is a nice clean note with obvious but moderate signs of wear. Creases that break the ink will be visible, but generally only one in each direction, and neither crease too deep. Its corner points will be dull. While not limp, it will have only some of the crispness of better-grade notes. No significant stains are visible.
Fine (F) - This is a worn but not worn out note. It has no crispness left. It will have heavy creases, but none that threaten the structural integrity of the note. Its edges may not be perfectly smooth, but are not irregularly worn. Trivial ink marks and smudges are acceptable.
Very Good (VG) - This note is worn and limp. It has serious, deep creases. The edges are worn and not even. Some ink marks or smudges are visible. Tiny tears may be present but no parts missing. Small staple or pinholes are acceptable.
Good (G) - This condition is not considered collectible for most purposes. Only the rarest of notes in this grade could find a home with most collectors. It is usually limp, heavily creased, stained, ripped and pinned or stapled. Some of the creases will permit spots of light to shine through the note at their intersections.