Because they are formed deep within the earth, under extreme heat and pressure; virtually all diamonds contain "birthmarks"; small imperfections inside the diamond (called inclusions), or on its surface (called blemishes). Clarity refers to the degree to which these imperfections are present. Diamonds which contain numerous or significant inclusions or blemishes have less brilliance because the flaws interfere with the path of light through the diamond.
Clarity grading in diamonds is very minute i.e visibility of inclusions is checked at 30x magnification under a microscope. A minor pinpoint inclusion will lower a clarity grading of a diamond from Flawless to VVS1. To the naked eye, a VS graded or a VVS/IF graded piece will look no different but there is a significant difference in value.
It is important to note that usually clarity grades above SI1 are not visible to the naked eye. IDIAM verifies and provides grading (under the Eye Clean parameter) on whether the inclusions are visible to the naked eye or not.
Labs use a diamond plot to map a diamond's interior and exterior flaws. The flaws are found under 10x magnification by a skilled grader.
If you cannot tolerate imperfections, even those you cannot see, choose a VVS2 or better diamond. About 10% of all diamonds fall into this category.
The most popular range is the VS1-VS2 diamond. These diamonds appear flawless to the naked eye, and are a fraction of the price of a truly flawless diamond.
The next most popular range is SI1, where the inclusions are usually not significant enough to impact the appearance of the diamond for the casual observer. Often, customers will opt for this clarity range in exchange for a higher cut or color grade. This combination often results in a beautiful, lively diamond with imperfections detectable only upon close inspection. In diamonds under 1 carat, the same can be said for an SI2 grade.
The larger the diamond, the easier imperfections are to detect; therefore Clarity becomes more important. For diamonds over 2 carats, a clarity grade of VS2 or higher is the safest bet for avoiding any signs of visible inclusions. In diamonds between 1 and 2 carats, clarity grades of SI1 or better will not have inclusions easily visible to the naked eye.
Brilliant-cut diamonds (such as round, princess, cushion, oval, pear, and marquise) hide inclusions better than step cuts (emerald, asscher). When purchasing a step-cut, move up one clarity grade (e.g. purchase a VS2 instead of an SI1 if you desire the lowest grade that has no visible inclusions).