Dirtiness and Holiness

Scripture says that every Christian is holy, or a saint. If we were to be honest, most would agree that we usually see ourselves as anything but holy. In actuality, we feel more dirty than holy. More like scums than saints! And yet, we are called holy saints. What does this mean? How can we be holy if we feel so dirty? And if it is true that we are holy, how does this affect the way we think and feel about God and ourselves? And how do we go about living holy lives?