The Bible teaches that the moment you first put your faith in Jesus Christ alone, two magnificent and significant things happen that completely change your identity and destiny forever!
1. You are fully forgiven of all your sins forever! This includes all of the sins you have ever committed in the past and all of the sins you will ever commit in the future. God will never hold any of these sins against you because, on the cross, Jesus suffered the full penalty (the penalty we rightfully deserve) for all of them! This includes the sins you will commit tomorrow, next week, next month and next year! It includes all of the sins you will ever commit in your lifetime!
Approximately 2,000 years ago, Jesus faced the fury of God's wrath for all your sins (without exception). He shed His blood and died in your place (as your personal substitute) taking your punishment upon Himself to the fullest extent. He suffered God's judgment and condemnation, so that you would never have to!
2. In the court of heaven, God pronounces that you are "Not guilty!" and that you are now “Perfectly righteous forever!” in His sight. He does this solely on the basis of Christ's death and resurrection for anyone who simply believes in Him. He freely and graciously credits (imputes) the righteousness that He demands to those who have absolutely no righteousness of their own.
In Christ, God treats you, not only as if you were without sin, but also as having the very righteousness of Christ Himself! This is your new perfect, permanent and unchanging identity!
A hymn writer once wrote, "Near, so very near to God, nearer I could not be; for in the Person of His Son, I am as near as He. Dear, so very dear to God, dearer I could not be; for in the Person of His Son, I am as dear as He."
The two magnificent realities described above are true of anyone and everyone who has put their faith in (reliance upon) what Jesus has already accomplished for us through His death and resurrection. These realities are undeserved, unmerited and freely given which means they can never be taken away or lost!
It is essential and comforting to understand that this is entirely God's doing, not ours. In other words, it is not dependent (or impacted) in any way by our moment-by-moment walk with Christ. Instead, it is the final and eternal declaration of God that remains true, regardless of whether we are living in obedience or not - whether we are living righteously or not. It is based solely on Christ's righteousness alone!!!
Does this mean that God doesn't care about how we live as believers? Does this mean that once we are forgiven and made right with God, it doesn't matter, what we do? God's desire is that our moment-by-moment walk with Him will reflect our new unchanging identity in Christ (as described above). This can only take place as we walk by the Spirit (i.e., as we live under His influence, in complete dependence on Him) and as He produces His fruit in our lives. God wants those of us who have believed in Him "to be careful to good works" - to be attentive and eager to do what pleases Him. We are not made right with God by doing these works, but once we have received eternal salvation by faith alone in Christ alone, He wants our lives to be characterized by doing His work and serving others.
"For it is by grace you have been saved, through faith—and this is not from yourselves, it is the gift of God— not by works, so that no one can boast. For we are God’s handiwork, created in Christ Jesus to do good works, which God prepared in advance for us to do." (Ephesians 2:8-9)