The Council of Trent (Catholic doctrine) says this about Justification:
“God justifies the impious by His grace, through the redemption that is in Christ Jesus; and when, understanding themselves to be sinners, they, by turning themselves, from the fear of divine justice whereby they are profitably agitated, to consider the mercy of God, are raised unto hope, confiding that God will be propitious to them for Christ’s sake; and they begin to love Him as the fountain of all justice; and are therefore moved against sins by a certain hatred and detestation, to wit, by that penitence which must be performed before baptism: lastly, when they purpose to receive baptism, to begin a new life, and to keep the commandments of God.”
In essence, the way I understand it, is that Catholic theology says a man is justified by Christ, and is granted the Holy Spirit who works grace in the believer to complete his justification. This often leads a blending of justification and sanctification. If the Catholic doesn’t get all his acts of grace done before his death, he can finish the work in purgatory.
Reformation theology threw a fit over this, but then they went into another extreme direction, which misses out on Scripture as well. Reformation theology says that our justification is merited by works, but not our works, the works of Christ.
John Calvin says, “By his obedience, however, Christ truly acquired and merited grace for us with his Father. Many passages of Scripture surely and firmly attest this. l take it to be commonplace that if Christ made satisfaction for sins, if he paid the penalty owed by us, if he appeased God by his obedience… then he acquired salvation for us by his righteousness, which is tantamount to deserving it…Hence it is absurd to set Christ’s merit against God’s mercy.” (Institutes, 2.17.1, 3)
Therefore, justification is entirely out of our hands, God justifies people and those people might not even be aware of it. People receive irresistable grace, they get saved by God’s decree not by anything they did, but by God’s election and Christ’s merit on their behalf.
Both seem to miss the truth of justification as put forth in Scripture. No man is justified by deeds of the law, not even if it was Jesus Christ’s deeds of the law. Salvation is not merited by Christ or us.
Salvation is a free gift (gifts are not merited) of God’s grace made available to us through the perfect sacrifice of Jesus Christ, the shedding of His blood and His subsequent resurrection. We benefit from this by faith.
Here’s what Paul says: “Much more then, being now justified by his blood, we shall be saved from wrath through him.” “Who was delivered for our offences, and was raised again for our justification.”
We are not justified by the meritorious works of Christ, we are not justified by works, we are justified by Grace, God’s merciful sacrifice of His Son on our behalf, which we benefit from through faith.