Imputed righteousness is the Protestant solution to a "divine predicament." On the one hand, God is infinitely merciful, "not wishing for any to perish, but for all to come to repentance." (2 Peter 3:9). On the other, God is infinitely holy and just, which means that he cannot approve of or even look upon evil (Hab. 1:13), neither can he justify a wicked person (Prov. 17:15). Because the Bible describes all men as sinners and says that there are none who are righteous (Rom. 3:23, 10), these two "competing" traits in God's nature appear to put him in a dilemma. To use the words of the apostle Paul, how can God be "just and the justifier of those who believe (Rom. 3:26)?" Through this argument God cannot ignore or in any way overlook sin.

Protestants' answer to this dilemma is the imputed righteousness. First of all, they note that the New Testament describes the method of man's salvation as the "righteousness of God" (Rom. 3:21, 22; 10:3; Phil. 3:9). They then note that this "righteousness" is more particularly that of the second member of the Trinity, Jesus Christ (2 Cor. 5:21; 1 Cor. 1:30). When they refer to the "imputed righteousness of Christ," they are referring to his life of sinlessness and perfect obedience to God's law on this earth. The need for a human life of perfect obedience to God's law was the reason, they claim, that Christ had to live as a human being for a certain period of time. Paul's statement in Rom. 4:6, that God "imputes righteousness apart from works," bolsters the fourth step in their argument that this righteousness of Christ is imputed to our accounts. By this terminology they mean that God legally credits the believer with the righteous acts that Christ performed while on this earth. This is not a "legal fiction," they argue just as adoption is not a legal fiction. Adoption legally constitutes a child the son or daughter of a person that is not that child's birth parent. Similarly, in marriage the married partners are considered one entity legally. When a sinner believes in Christ, they are spiritually united with Christ, and that union makes it possible for God to credit believers with the righteousness of Christ without engaging in "legal fiction."