First, let's take a quick moment to go over the 4 C's of diamonds. If you have looked into diamonds before you have probably heard of them before. If you are new to this, you are sure to hear about them during your search for an engagement ring (or other diamond jewelry).

The 4 C's are: Carat, Cut, Clarity and Color.

Carat is pretty straightforward - it is the weight of the diamond. One carat is equal to 200 milligrams. You need a highly accurate scale to measure this, but once you do it is as simple as putting the diamond on the scale.

Cut refers to how well the diamond is cut and how well the angles and proportions work together to produce a brilliant, fiery and full of sparkle diamond.

Color refers to the amount of color present in the diamond. Almost all diamonds have a slight tinge of yellow in them, although it is extremely difficult to spot for the most part. Diamonds are graded from D to Z, with a D graded diamond having no color whatsoever.

Clarity is a measure of how many "inclusions" or blemishes are present within the diamond. The grading scale for clarity (from the highest to lowest) is: IF, FL, VVS1, VVS2, VS1, VS2, SI1, SI2, I1, I2.

How do you know how a diamond measures up in each of these categories?

You will find all of these gradings on the diamond grading certificate. A diamond certificate is issued by a laboratory that will inspect the diamond using specialized equipment.

However, not all diamond grading certificates are created equal. Some labs are much more lenient than others. Keep in mind that grades given for color and clarity are determined by an individual while viewing the diamond under magnification. What one person considers a VS1 diamond may only receive an SI1 grade by someone else.

The two top labs are GIA and AGS. They are extremely consistent and are considered to be the least bias and most strict in their gradings. They have set the industry standards. HRD is another lab that I consider to be just as reputable, however it is not very common in North America. If you are in Europe, you are more likely to come across HRD diamond certificates.

There are a variety of other labs out there. EGL operates out of a number of different countries. You can find EGL-USA, ELG India or EGL in Belgium to name a few. EGL-USA is considered the best of the bunch, however none of these reports are as consistent as AGS or GIA. They are often one or two grades "softer" in color or clarity. This means that they are more likely to grade higher than AGS or GIA.

IGI and GemScan are two others. IGI has a particularly poor reputation and is known for giving out very inconsistent grades.

This is very important to keep in mind when you are shopping for a diamond. Remember, the price of a diamond is determined based on the 4 C's. The higher the gradings - the higher the price! If you have a diamond graded by IGI or a lab with a poor reputation, you could end up paying more money than you should simply because the lab was overly generous with their gradings.

I suggest only sticking to AGS or GIA. You just can't take any risk when you are buying such an important (and expensive!) item. By only shopping for diamonds graded by AGS or GIA, you make sure you get what you are paying for.

Go to my website if you want to have a look at a Diamond Buying Guide that will help you find that perfect diamond at the perfect price. I see way too many people overpaying for their diamonds - the guide will show you the secrets you need to save a huge chunk of cash on your purchase. I hope it helps!