I recently received the following question from someone: "What's the biggest problem with saying that imputation is only the declared righteousness of Christ and not a transfer of (Christ's meritorious) righteousness?"
I answered as follows:
Virtually everyone today agrees that God “declares” us righteous. God says, “justified” to those the Holy Spirit brings into union with Christ. But that doesn’t answer the question of *why* He declares us righteous in the first place. It doesn’t give us the ground of the verdict. The ground of a verdict is the legal reason that a judge declares a person "just" and "not guilty." The ground of all just legal verdicts is whether or not a person has conformed to the law.
Some may say that God declares us righteous on the ground of our faith. But our faith is imperfect, while the law of God requires perfect faith to be at the ground of justification. Someone may say God declares us righteous because of our imperfect faithful obedience. Again, the problem is that the law requires perfect obedience. To suggest that God declares us righteous on the basis of anything other than actual perfect righteousness is to compromise the justice of God and thus God’s own holy character.
Others say that God declares us righteous because we are united to Christ and to the legal verdict the Father gave to Him at His resurrection, but that we are not united to Christ’s meritorious righteousness (deserved righteousness). I define “merit” in its strict sense only to mean "just deserts."
All the above views that deny the imputation of Christ's righteousness make it possible for true believers to fall away from Christ. Here’s the reason: If Christ’s righteousness is not credited to you, then God is not obligated by justice to treat you like you deserve to live forever. If Christ did not deserve life in your place as a substitute, then God is not obligated by justice to give you life-preserving grace. Now some may deny imputed righteousness while affirming that God will preserve all believers anyway, but they must also deny that God is obligated by justice to do so.
Once the possibility of losing your salvation is affirmed, then there is no more doctrine of assurance of final salvation. Denial of imputation, practically speaking, often leads to the loss of confidence that God will preserve you to the end and give you the fulness of eternal life.
The loss of the doctrine of final assurance leads, in turn, to an inability to trust God to save you to the uttermost, since God has guaranteed no such thing. That means you must trust your own faith, efforts, and works to stay in God’s graces, which is a sinful, self-trusting, manner of striving for holiness that does not produce holiness, is not sanctification, and does not glorify God.
Therefore, the loss of the doctrine of Christ’s imputed righteousness not only leads to a theological denial of the absolute justice and holiness of God (since God accepts imperfect works for justification that do not meet the standard of His own justice), but also leads to stunted personal holiness and to dimming the glory of God in His people (since there can be no assurance of final salvation and believers are thrown back on themselves to endure to the end).