We are justified by the redemption that Christ bought for us with His blood. That means we are counted as in the right with God, because of the work of Christ in the cross and resurrection. This justification comes as a free gift, it is a gift of grace. We did nothing to earn it.
Through Christ we have been redeemed, and God put Christ forward as a "propitiation". Now in some versions you won't find this word, you might find "atonement" or "expiation". However, "propitiation" is the best translation. It is worth looking at both "redemption" and "propitiation" in a little more detail, for they are not words in common use today. In the society of the day slaves could be redeemed. What happened was that an amount of money was paid, and the person became the slave of a "god". This meant in effect that the person was now free. Remembering this will help us to appreciate why later on Paul refers to us as slaves of Christ.
When they went on a journey people would make some sacrifice or offering to a "god" hoping that the god would be propitious towards them on the journey, ie would look upon them with favour. Without Christ we are enemies of God because of our sin. Our sin demands judgement. As Paul says elsewhere, we are by nature objects of wrath (Eph 2:3). The blood of Christ has paid for our sins, so we are no longer under a sentence of death, we are no longer objects of wrath. So we now live under the favour of God.
Now understand that this does not mean that God did not love us before Christ died, but our sin demanded judgement. Indeed, God so loved us that He sent His Son to take away our sin (John 3:16).
"This was to show God's righteousness". People often object that it is unfair that someone can do something terrible and be forgiven by God, and without the cross it would indeed be unfair. But the cross is God's act of righteousness, our sin is fully paid for.
And we appropriate all this through faith.
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