Loose Diamonds
Courtesy of Blue Nile
Clarity
Description
Flawless
FL
No internal or external flaws
Internally Flawless
IF
No internal flaws, slight external blemishes
Very, Very Slight Inclusions
VVS1, VVS2
Inclusions very difficult to see under 10X
magnification
Very Slight Inclusions
VS1, VS2
Inclusions difficult to see under 10X
magnification
Slight Inclusions
SI1, SI2, SI3
Inclusions easy to see under 10X magnification
and might be visible to the naked eye
Included
I1, I2, I3
Inclusions that are visible to the naked eye
diamond clarity
Examples:
SI1, SI2, SI3                     I1                            I2, I3
Buyers' Tips
Stay AWAY from I1, I2, I3 (Included clarity) diamonds!  These can be visible with the
naked eye.
It is important to keep in mind that some inclusions may be able to be hidden behind a
part of the mounting.  You can substantially reduce the cost of a diamond if you see that
the inclusion will be hidden behind the mounting and not affect the beauty of the
diamond.  On the other hand, an inclusion on the middle or top of the diamond can
affect the dispersion of light and make a diamond appear less brilliant.
You can get an excellent value with diamonds that have Slight Inclusions (SI1, SI2, SI3),
but you should consult with the dealer as to whether any of the inclusions can be visible
to the naked eye and if so, will they be able to hidden by the mounting.
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Quality
Clarity
Clarity

Diamonds that are absolutely clear without inclusions-fractures,
scratches, or trace minerals are referred to as flawless and are the
rarest.  Most diamonds, like people, have natural blemishes that
are characteristic of that particular piece.  The best way to view
these blemishes (inclusions) is with the use of a 10x jeweler's
magnifying loupe. Even though an inclusion may not be visible to
the naked eye it can have an effect because when light enters a
diamond it is reflected and refracted.  If anything is disrupting the
light flow, such as an inclusion, a portion of the light that would be
reflected is lost.  The certification societies have standardized a
grading system to describe the clarity of a diamond.  
FL                     VVS1, VVS2             VS1, VS2
Diamond Buying Guide