grading scale

M - Mint

Record: In perfect shape. No visual marks can be spottet as well there is no dirt or nasty  fingerprints viewable. The record looks unplayed.
Cover: On a mint cover you're not going to find any defects. Looks like new from a shop.

NM - Near Mint

Record: On a near mint record no real surface mark can be seen, possibly some real light  marks can be seen caused taking the record out of the sleeve. Not looking like wear of using the record.
Cover: The cover should have no creases, folds, seam splits or any other noticeable similar  defect. No cut-out holes, either. And of course, the same should be true of any other inserts, such as posters, lyric sleeves and the like. In general, if not for a couple minor things wrong with it, this would be Mint.

EX - Excellent

Record: An excellent record will show some signs that it was played and otherwise handled  by a previous owner who took good care of it. Record surfaces may show some signs of light wear and may have slight scuffs or minor scratches that don't affect that much one's listening experience. An excellent record can have some visible marks, but no major surface marks which affects  really playing the record.
Cover: Might have some ring wear, lighter turned-up corners, or a not bad seam split. Those or other damage can be found but the cover overall is not looking bad. Also every cover that got a cut out mark cannot be better than ex! No matter what shape the item is even if it is mint elsewhere.

VG - Very Good

Record: Many of the defects found in a EX record will be more pronounced in a VG disc. Surface noise will be evident upon playing, especially in soft passages and during a song's intro and fade, but will not overpower the music otherwise. Groove wear will start to be noticeable, as well scratches that will affect the sound.
Cover: Cover will have some defects like a little stronger ring wear, turned-up corners. A  jacket or sleeve will have seam splits, especially at the bottom or on the spine. It just looks used.

G -  Good

Record: Good does not mean bad! A record in Good or Good Plus condition can be put onto a turntable and will play through without skipping. But it will have significant surface noise and scratches, visible groove wear and major surface marks! If it's a common item, you'll probably find another copy in better shape eventually. Pass it up. But if it's something  you have been seeking for years, and the price is right, get it... but keep looking to upgrade. Scratches def. taking affect on the sound quality.
Cover: Cover will have defects like mentioned in VG but they are too strong or other defects appear like scuffing of edges, water damage, discolouration. It looks more abused than  used.

F - Fair

Record: The record is still just playable but has not been cared for properly and displays considerable surface noise; it may even jump.
Cover: The cover and contents will be torn, stained and/or defaced.