I'd love the pastors to chime in here but I'll give my take in the meantime. I've asked this same question before.

For me this question started out wondering how the Old Testament folks were saved if Jesus hadn't come yet. When I read the passage Genesis 15:6 I got an idea where it says, "And he [Abraham] believed the LORD, and he counted it to him as righteousness." This same type of phrase comes up through the bible. Where people are credited with righteousness by their faith or belief.

The strong statement about this comes from Ephesians 2:8-9 where it says, "For by grace you have been saved through faith; and that not of yourselves, it is the gift of God; not as a result of works, so that no one may boast." For me this is pretty clear.

But, then you throw in Matthew 19:16-17 where it says,

And someone came to Him and said, "Teacher, what good thing shall I do that I may obtain eternal life?"

And He said to him, "Why are you asking Me about what is good? There is only One who is good; but if you wish to enter into life, keep the commandments."

The problem here is the no one can keep all the commandments. Have you ever met anyone who has done that? Do you know anyone who is capable of that? Anyone capable of not sinning. If someone does not have faith they have sinned and therefore not kept the commandments.

Or, You get James 2:24 where it says, "You see that a man is justified by works and not by faith alone." But, the passages around it talk about righteousness by faith and refer to Abraham. I looked up some definitions of the word justified to try and get more insight into it. The meaning that seems to fit in context and is one I read in more than a couple commentaries was "to show or exhibit one to be righteousness". Notice, this doesn't make someone righteous it just shows the righteousness off.

This gets into the idea we see in the bible that real faith is not empty of good works. Real faith means good works go along with it. Think of the fruits of the spirit in Galatians.

Hope this helps.

The framework I picked up at Seminary that really helps me make sense of all of this is the Two Kinds of Righteousness. Here's a copy of something I sent to one of the elders at a church that I'm helping at when he asked this question:

Lance, I think a better mode to understand this begins with the word "righteous", although, I would define it as, quite simply, "being right". Typically I view this as a relational term so it's all about being in right relationship with others.

Now, there are two types of others that we need to consider. First, God. Second, people. This of course fits right into the Great Commandment. The question is, "How are we righteous in each of these two places?"

Before God, it's completely about receiving grace. This is where justification comes it ... which literally means to be made just or right.

Now, before people, it's a different story. Before God we have to be made right because there is nothing that we can offer God because, well, God already has everything. However, our neighbors have lots of needs that we can help them out with. At this level, being righteous is all about our works and how we serve other people. This is the realm of sanctification where Christians, by the power of the Holy Spirit, are motivated to serve others because it's what God calls us to do.

Hope this helps make some sense of it all.

I second that final line here.

BTW, that whole being righteous before your neighbor is to me, the very essence of a super average faith.