That Abraham “believed in God and was declared righteous” is an important point for Paul. But it is critical to Paul’s point to know when Abraham believed. He trusted in God’s word before the sign of the Covenant was given, in Genesis 15 not 17. What is more, Abraham believed in God well before his great demonstration of faith in Genesis 22. The reader of Galatians needs to know the whole flow of the Abraham story in Genesis 12-24 in order to grasp the full impact of Paul’s point.
Paul also uses Abraham as an example in both Romans and Galatians. Why select Abraham as the model of faith? It is possible the agitators themselves have been using Abraham in their teaching, since Abraham was a Gentile who believed God and that belief was “credited to him as righteousness.” Paul’s opponents in Galatia may have argued the Gentiles now coming to Christ are in the same category as Abraham, and Abraham was circumcised as a sign of his covenant with God.
God credited this belief to Abraham. The verb חשׁב refers to considering an internal thought which “reckons” or considers something. It is an evaluation or something-“to reckon” not in the sense of counting numerically but of evaluative assessment” (TLOT, 480).
Righteousness is a key theological term in both the Old and New Testament. Christians tend to hear “righteousness” as personal holiness. Although this is certainly part of what the term can mean, modern reductions to “sinlessness” miss the rich use of this word to cover all sorts of activities from honesty to justice.
But in the Old Testament, righteousness is usually associated with one’s actions with respect to a standard, such as the Law. If one keeps the Law, then one is “righteous,” which implies a moral standard. But “sin” in the Old Testament is far more than moral offenses against God, physical uncleanliness separates one from God, so a woman (for example) who has given birth is “unclean” and needs to make a sin offering. Giving birth is not a moral problem, but a change of physical status.
In Galatians 3:7-9, Paul is creating a biblical argument, focusing on the phrase “credited as righteousness” in Genesis 15. In this story, Abraham believed in the word of God as revealed to him and God considered him “right with God” as a result. At this point in history, Abraham should be considered a Gentile, at least by the rules imposed by the agitators in the Galatian churches. He was uncircumcised and the food and Sabbath laws have not yet been given. Since he believes in the God who called him out of his father’s land, he a “converted pagan,” just like the Galatian believers.
This is in contrast to other views of Abraham in Judaism of the Second Temple Period. For example, in the apocryphal book Sirach, Abraham is described as having kept the “law of the Most High,” so God entered into a covenant with him and “certified the covenant in his flesh” (Sirach 44:19-21). Paul does not rewrite Scripture like so much of the literature of the Second Temple Period did. He considers Abraham as a Gentile who was made right with God by faith in what God told him, not by works (either circumcision or the Law).
Abraham is therefore the perfect model for Paul to use since he was justified before the Law: he was justified by faith not by the act of circumcision.