In addition to the type of cut a diamond has and whether it is a natural or synthetic diamond, there is another qualification to a diamond that effects its value - its clarity. Clarity is determined by the size and number of inclusions a diamond has. These inclusions are caused by stress on the diamond as it forms or as it is cut. Diamond retailers grade their diamonds clarity under these following catagories.

Flawless

A flawless diamond is one with zero inclusions, even under magnification. Flawless diamonds are extremely rare - and extremely expensive. Some flawless diamonds can be scratched by the cutting process, however, and are then considered to be internally flawless. Luckily, most external flaws can be removed by extra polishing.

VS1 and VS2

When a diamond's inclusions can only be noticed by an expert in diamonds and under a magnification of 10X, then the diamonds clarity is rates either VS1 or VS2 (the VS stands for "very slight"). VS1 diamonds have inclusions that can be seen by magnification from the top of the diamond and VS2 diamonds can be seen only by magnification looking through the bottom of the diamond.

Some diamond retailers will also rate a diamond's inclusions as VVS or "very, very slight." VVS and VS diamonds are very expensive, though not as rare and costly as flawless diamonds.

S1 and S2

Diamonds with slight inclusions are rated as S1 or S2 diamonds. The inclusions in these diamonds can be noticed by anyone under 10X magnification. S1 inclusions are seen through the top of the diamond and S2 inclusions are seen through the bottom of the diamond. These diamonds are the most common and affordable diamond on the market.

I1 and I2

When a diamond's clarity os so bad that you can see the inclusions with the naked eye, it is given an I1 or I2 rating. These diamonds have little value and most diamond retailers won't carry them.