Imputed Righteousness vs. Imparted Righteousness
Once we have entered into the new covenant, our spirit is perfect (complete), and there is no fixing that needs to occur there. This is where, legally, we have been made right with God freely and immediately the moment we have placed our faith in Jesus Christ for salvation. This is where Christ’s righteousness is credited to us on the basis of faith alone. This is what we call imputed righteousness. We need to recognize that God has done all that is required to fix us already. All we need to do is rest in that finished work and allow the fruit of the Spirit to begin to naturally produce in our lives from our knowledge of Him, our love for Him and our dependence upon the Holy Spirit.
Imparted righteousness is where we grow in righteousness from glory to glory. It is where we lean on, yield to, and cooperate with the Holy Spirit daily to live a holy life―a life that is pleasing to God. Imparted righteousness consists of our progressive and experiential sanctification. It is the righteousness that is worked from the inside out, or in other words, from our spirit, through our soul, and into the realm where people can see. Our imparted righteousness can only happen on the basis of our positional or imputed righteousness through faith in Christ. If we try to grow in the love of God and to overcome our weaknesses, failures, and sin in our own strength, that is, apart from the Holy Spirit’s help, and apart from a revelation of who we are in Christ or without an understanding that Christ has already set us free from sin, all we will be left with is the law. The law, that is the old covenant, tells us what we must do and must not do or how we must be, and our only job will be to meet it somehow. But the law will not help us meet it. On the other hand, grace, that is the new covenant, not only will teach us what is right but also will help us do it. Again, grace is not only the unmerited favor of God, but also the power of God to live holy.
We are loved apart from our works. We must ask ourselves “Am I serving God to get saved or because I am saved?” All of our works must have been first purified by the grace of God—we work because we are already accepted through Christ. Out of the revelation that He loves us, we will obey Him, but it cannot be the other way around. Obedience is a symptom of salvation—salvation comes first. We must always keep the order right, or we will always be prey to legalism and to religious OCD.
We will be asked to give an account of what we did with our free gift of salvation the day we stand before Him. But He will not ask us for anything other than what He has first given us and equipped us to be able to produce. In other words, what He is looking for is faithfulness. But again, if we will stop doing things because we believe we have to, we will realize that we want to—our new nature, given to us as a free gift, strongly desires to serve God; we have been given the power, the authority and the right to be children of God! Therefore, be encouraged―there is hope! There is a way out.
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[You] who are kept by the power of God through faith unto salvation ready to be revealed in the last time.
—1 Peter 1:5 KJV
 See Romans 5:17; Ephesians 2:8-9; Romans 5:1; 2 Corinthians 5:21; Hebrews 10:14.
 See John 14:15 AMPC. If you read it from the KJV, make sure to read the footnote from the NKJV; it says “You will keep”. This helps understand the spirit of the verse.
 See Galatians 3:3; Galatians 5:22-23.
 See Luke 11:46.
 See Titus 2:12; 2 Peter 1:4; 2 Corinthians 3:6.
 See Romans 6:14.
 See John 1:12.