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Psalm 106:31 "This was credited to him as righteousness for endless generations to come."
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Phinehas’ faith made him righteous before God. See Genesis 15:6. Because Father Abraham, believed God, he was declared righteous before God. God looks at the heart, 1 Samuel 16:7: "But the Lord said to Samuel, 'Do not look at his appearance or at his physical stature, because I have refused him. For the Lord does not see as man sees; for man looks at the outward appearance, but the Lord looks at the heart.'" God alone knows the hearts of all men. 1 Kings 8:39
I believe it means the same then as it does today. By faith we are reckoned as righteous when we are justified. We cannot justify ourselves by works of the law but follow the example of faith that Abraham had. This is different to some mental ascent but a true living and active faith. This is the faith by which God reckons us as righteous.
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