One of the most difficult concepts for the Christian to grasp is that of his being viewed as righteous despite the fact that he knows he sins. We would not make light of this fact, that is, that we sin. All sin is an affront to the holiness of God. But neither would we demean the effectiveness of the atonement in bringing us to glory perfect in Christ! We should, yea, must mourn for our sinfulness (Mt. 5:4). But we must not so mourn as to mentally negate the effect of the cross. We do agree with Paul, that when we would do good, evil is present with us (Rom. 7:21). Read theologian, Alister McGrath's take on this. Maybe you'll have to read it twice. But it's worth it!
We are justified propter Christum per fidem - that is, on account of Christ, through faith. The basis of God's decision to place us in right relationship with Him lies in Christ Himself. We are justified on account of His obedience during His lifetime and His death upon the cross. It is because of Him, and not because of anything we have done or will do, that we are made right with God. But the means by which we are justified is faith. Faith is like a channel through which the benefits of Christ flow to us...both the external foundation and the internal means of appropriation of justification are God-given. Faith is not something we can achieve; it is something achieved within us by God.