How do we know justification is by grace?

Justification is established by Scripture as being solely by grace through faith, not by works. Lot was described as a 'righteous man' due to God's grace, despite his many failures and poor decisions (2 Peter 2:7-8). This underscores that justification is granted by God’s imputation of Christ’s righteousness to the believer, as Paul elaborates in Romans 5:1, stating we are justified by faith and have peace with God. Our works do not earn us justification; rather, it is the result of God's grace and the work of Christ on behalf of sinners, emphasizing that all glory belongs to God alone.