In the third chapter of his Hilkhot Teshuba Maimonides explains that in terms of religious behavior, we find three categories of people: rasha, tzadiq, benoni .
The rasha (wicked) is the person whose balance of actions is negative. Then we have the tzadiq (righteous), the one who has done more good than bad. And then, the benoni, which Maimonides defines as the person whose good and bad actions are in a sort of a balance (3:1).
In the next Halakha (3:2) Maimonides clarifies that the calculation of good or bad actions is inaccessible to us. This estimation does not depend on the quantity of Mitzvot we do or on anything knowable to us. Part of this equation has to do with interior psychological forces that drive us, our intentions, our inner potential, the effect our actions have in other people, etc. Those are matters that only God knows and can bring into account for a fair judgment.
Now, since we ignore whether in His eyes we are righteous or, God forbid, wicked, how do we have to see ourselves?
When I see myself as a completely righteous person I might relay too much in my merits and do nothing further to improve my life. Or if I see myself as wicked, I might think that I'm beyond redemption, and do nothing to improve.
Maimonides concludes that "a person should always perceive himself as benoni, i.e., standing in a balanced scale between equal amount of merits and sins...". This balanced scale is not stable at all. My immediate next action (or the next one, or perhaps the following one, etc.) will determine if I'm a good person or a bad person.
The best motivation to live a life of constant improvement is to perceive myself in the middle. And live and act as if the very next action I'm about to do will define me: my next choice is the tipping point of my entire personality.
“Life is like riding a bicycle. To keep your balance, you must keep moving.”