When planning to purchase a diamond it is important that you understand the lingo!

Diamonds are classified using a universal grading system called the 4 Cs which was developed by the Gemological Institute of America (GIA). The 4 Cs are Carat, Color, Clarity and Cut.
 

Carat
Carat is the weight of the diamond. One carat is divided into 100 points, therefore 25 points would weigh 0.25 carats. As the Carat weight goes up so does the rarity and price. However, two diamonds of equal carat weight can differ greatly in terms of price based on their color, clarity and cut.

Color
The less color a diamond has the higher it is valued (with exception to fancy-color diamonds, such as blue or green diamonds). GIA's color-grading scale is the industry standard. According to this scale, diamonds are graded on a letter basis beginning with the letter D, almost colorless, and continues (with increasing presence of color) through the letter Z.

Clarity
Clarity refers to the absence of inclusions (internal) or blemishes (external) in a diamond. It is rare to find a diamond without these "natural birthmarks" and this rarity greatly affects a diamond's value. The GIA created a clarity scale consisting of 11 grades:

Flawless (FL): No inclusions or blemishes are visible to a skilled grader using 10× magnification

Internally Flawless (IF): No inclusions and only blemishes are visible to a skilled grader using 10× magnification

Very, Very Slightly Included (VVS1 and VVS2): Inclusions are difficult for a skilled grader to see under 10× magnification

Very Slightly Included (VS1 and VS2): Inclusions are clearly visible under 10× magnification, but can be characterized as minor

Slightly Included (SI1 and SI2): Inclusions are noticeable to a skilled grader using 10× magnification

Included (I1, I2, and I3): Inclusions are obvious under 10× magnification and may affect transparency and brilliance

Many jewelers have never seen a flawless diamond! Most diamonds are in the VS (very slightly included) or SI (slightly included) categories.

Cut
A diamond's cut can be described in terms of its shape. The most popular diamond cut for jewelry is the round brilliant shape. All other cuts are known as fancy shapes, such as the pear, marquise, oval, emerald, and cushion. The cut of any diamond has three attributes: brilliance, fire and scintillation. Brilliance is the total light reflected from a diamond. Fire refers to the dispersion of light into the corners of the spectrum. Scintillation is the flash of light or sparkle when a diamond is moved. In terms of value, cut refers to a diamonds proportion, symmetry and polish.