INTERNAL FLAWS:
These are any of the many impurities that reside solely in the interior of the diamond. There are many kinds of internal flaws. A few important ones that you should familiarize yourself with are:

Crystal: Internal carbon or minute diamond crystal.

Clouds: Clouds are microscopic inclusions.

CLARITY GRADING:
The common scale used is based on 10-power magnification (hand held loupe or microscope). This means that for all practical purposes, any imperfection that is too small to be seen with x10 magnification does not "exist" when grading a diamond.

The purer a diamond, the greater its value.
The GIA defines the qualifications for each group in the scale as follows:

Internally flawless (and flawless) group: FL-IF
The highest clarity grade given. “The diamond in question will be without imperfections
visible with x10 magnification. Some blemishes may be permitted externally bringing the stone to a clarity of “IF” or Internally Flawless”.

Very very slightly included group: VVS1 and VVs2
The VVS group is divided into two, VVS1 and VVS2: “The VVS inclusion in question will be
very hard to detect, even for an experienced examiner using x10 power magnification”.

VVS1: These diamonds are very close to being Internally flawless. Only a minute imperfection, that is almost impossible to detect under magnification, lowers it to a VVS1 grade.

VVS2: Great buys for people who would like a flawless diamond but would rather not pay the high price. It is very hard for a novice to see the imperfection in this diamond even under magnification.

Very slight included group: VS1 and VS2
The definition of this group is as follows: “The VS inclusion in question will be hard to detect, even for an experienced examiner using x10 power magnification”.

VS1: Have imperfections that are very hard to detect with a jewelers loupe. These diamonds are much cheaper than the IF-VVS2 range and are very popular.

VS2: Considered to be without significant inclusions. They are the most popular in the VS2-IF range. A beginner would find it very hard to detect the imperfection with the aid of a jewelers loupe.

Slightly included group: SI1, SI2 and SI3
The majority of engagement diamonds bought today are of the SI range: “Inclusions and
imperfections in this group may be visible easily with the aid of x10 magnification”.
SI3, a relatively new grade added by some laboratories to bridge the very wide gap between SI2 and I1 (imperfect).

SI1: Can be seen easily with x10 magnification. Cannot be viewed with the naked eye. This is the most popular clarity today. These diamonds are 100% eye clean, so for all practical purposes when in a ring they will look to absolutely clean with no imperfections.

SI2: Can be seen easily with x10 magnification. In some cases the SI2 can be viewed with the naked eye - especially if the SI2 is in the center of the diamond. A SI2 off to the side of the diamond is harder (if not impossible) to see with the naked eye. If the SI2 is up against the side of the diamond it can be covered with the prongs of the jewelry, leaving you with a "clean" diamond for a lot less than a SI1.

SI3: Can be seen very easily with x10 magnification. In most cases (stones above 3/4 of a
carat) can be viewed with the naked eye. This grade is not recognized by the GIA and thus
we do not sell them. Other less strict labs do use this grade.

Imperfect group:
I1, I2 and I3 The imperfect group is the final group on the diamond scale: "Flaws in diamonds from this category are visible with the naked eye".

I1: Diamonds in the I1 range are still pleasing to the eye. The imperfection is not large enough to take away from the general brilliance of the stone. In many cases the I1 impurity is off to the side of the diamond and can be covered up quite nicely by the rings prongs thus leaving you with a "clean" diamond for a very reasonable price. This is the lowest clarity grade we sell.

I2: Diamonds in the I2 range have large imperfections that in some cases cover a substantial portion of the stone. They are also easily visible to the naked eye. We do not sell I2 quality diamonds.

I3: If you're shopping for "rejection grade" diamonds, this is the group for you. These diamonds are so heavily included that they have essentially lost any appeal, or "life". We do not sell I3 quality diamonds.