10 For whoever keeps the whole law and yet stumbles at just one point is guilty of breaking all of it. 11 For he who said, “You shall not commit adultery,” also said, “You shall not murder.” If you do not commit adultery but do commit murder, you have become a lawbreaker. 12 Speak and act as those who are going to be judged by the law that gives freedom, 13 because judgment without mercy will be shown to anyone who has not been merciful. Mercy triumphs over judgment. — James 2:10-13 NIV
God gave the Old Testament law to the children of Israel to show them that it was impossible for a mere human to live a life free of sin. No one was able to live a life without sin, so God, in His mercy established rituals and procedures for them to keep. As long as they stayed obedient to these rituals, they were not punished for their sins. Mercy is the lack of or a lesser punishment than our sins deserve(d). Just as the people back then received mercy, we can and do receive mercy without receiving salvation. It is God’s mercy that allows us to go on living, even when we choose a lifestyle of sin. We live under the law or covenant of grace. This does not mean that we don’t sin, it just means that we have a way of being forgiven without the rituals. Grace is God choosing to bless us even though we don’t deserve it. It is our faith in His grace that saves us. When we feel that someone has wronged us in any way, we must show them mercy because of the mercy that God has shown us. We must temper our judgment with mercy, realizing that we have received so much more than mercy from Jesus Christ. We should also show them grace, in the sense that it means showing them affection and kindness even though they are not worthy of it. Neither were/are we worthy of God’s mercy and grace, yet He went so far as to die for us.
6 You see, at just the right time, when we were still powerless, Christ died for the ungodly. 7 Very rarely will anyone die for a righteous person, though for a good person someone might possibly dare to die. 8 But God demonstrates his own love for us in this: While we were still sinners, Christ died for us. — Romans 5:6-8 NIV
This is why we must show mercy, grace and forgiveness to those around us. We can and must forgive them of their sinful acts toward us. But only God can forgive us for all of our sins. Our mercy and grace is limited to what is done to us. God’s mercy and grace is unlimited. Only His grace can restore our relationship with God the Father. We must ask for His forgiveness believing that by grace through faith we have been saved, are being saved and will be completely saved.
24 but because Jesus lives forever, he has a permanent priesthood. 25 Therefore he is able to save completely those who come to God through him, because he always lives to intercede for them. – Hebrews 7:24, 25 NIV