The word “teshuvah”-”repentance”-designates returning: the sinner returns to his status before the sin, in the language of the Tanya: “in order that he should be acceptable before G‑d, as beloved of Him as before the sin.” This means that the repentance totally erases all trace of the sin for the future. Moreover, it also retroactively corrects past blemishes. This accords with our sages’ statement that  repentance from fear is from henceforth: like a blemished person who is healed. However, repentance from love uproots the sin from its beginning, and it is as if he never sinned.

This nature-transcending power, the ability to change the past, can be explained in three ways:

1) Repentance renews the bond between a Jew and his Creator. Since G‑d is above time-past, present, and future simultaneously-a person bound to G‑d also partakes somewhat of this quality.

2) A Jew is essentially good, and even when sinning he has a Divine attachment, albeit one temporarily concealed. Therefore repentance can uproot the sin retroactively, for it does not create a new existence; it only reveals pre-existing good.

3) There is a halachic principle that “Everything that is about to be cut is considered as already cut.” Similarly, everyone who will repent-and every Jew repents in the end-is considered a penitent. Thus, even while sinning he is considered a penitent (except that he must actually repent to cancel the sin).

(Likkutei Sichot, vol. 6, p. 54)