I use the Goldmine Grading System. I note any differences between vinyl and cover, and make note of any inserts, The covers may be a bit tarnished, but records are mint or near mint in most cases.

MINT (M) - Absolutely perfect in every way. Most often this is a still sealed record, records that have been opened are rarely if ever marked as Mint.

NEAR MINT (NM) - A good description is that it looks like it just came from a retail store and it was opened for the first time. In other words, it?s nearly perfect, with no visible defects. 

VERY GOOD PLUS (VG+) - Except for a couple minor things, this could be Near Mint. Most collectors will be happy with a VG+ record, especially if on the high end (VG++). VG+ records may show slight signs of wear, including light scuffs or very light scratches that do not affect the listening experience. Covers should have only minor wear. 

VERY GOOD (VG) - VG records are among the biggest bargains, and for many, will be worth the money. They can lack the original gloss, may have surface noise, and some scratches may be audible, especially in soft passages. But the noise will not overpower the music. VG covers will have signs of handling, and may have minor splits. 

GOOD PLUS (G+) - Good+ does not mean bad! The record still plays through without skipping, but it has significant surface noise and groove wear. Cover may have significant ring wear, noticeable writing, or obvious damage.

GOOD (G) - Record may have some skipping, but is otherwise listenable. I generally avoid selling Good (G) rated records unless they are highly collectible or desirable, in order to enjoy until something better comes along. Cover has major wear or seam splits that need repair, or heavy writing like radio station call letters to prevent theft.