An accurate estimation of optical absorption coefficient (mu(abs)) and scattering coefficient (mu(sca)) is important in characterizing nanoparticles for identifying or optimizing applications such as photothermal therapy and photoacoustic imaging. In this exciting period where several fascinating methods have been unveiled for the synthesis of various nanoparticles, the field is still lacking in the availability of efficient characterization methods. We introduce an accurate and simple methodology to optically characterize nanoparticles which could fill the gap. This is based on differential pathlength spectroscopy (DPS), a dual optical fiber approach, originally developed to detect cancer endoscopically by measuring the optical properties of tissue in small interrogation volumes. We expand its use to nanoparticles in a method that allows us to resolve the effects of mu(abs) and mu(sca) in the extinction coefficient of low concentration samples. We outline the measurement protocol using the DPS system and describe the analysis of the data taking additional inputs from electron microscopy and discrete dipole approximation (DDA) simulations. The DPS signal from the sample is first translated into the backscattering coefficient using a calibration constant. Further, the backscattering coefficient is converted via the simulated scattering phase function into the scattering coefficient. With this knowledge and extinction coefficient measured using a conventional photospectrometer, the absorption coefficient is calculated. We prove the validity of the method using spherical and rod-shaped gold nanoparticles, comparing the results with outputs from DDA simulations. We also briefly touch upon the dilemma of the choice of the appropriate dielectric function for gold at the nanoscale.