Imperfections exist in most diamonds. When located inside the diamond, they are referred to as inclusions, while those on the surface are blemishes. As one would expect, the fewer inclusions or blemishes a diamond has, the higher its value. Clarity is affected by the size, number, position, nature and colour of any imperfections.

When grading for clarity one needs to consider several factors. For example, how easy is it to see the imperfections; can one see it with the naked eye; is there more than one irregularity; where is it positioned; what type of imperfection is it; and is there colour? Clarity grading is typically based on the largest and most recognizable imperfection.