Can good deeds erase bad deeds?

What the Quran says

This verse was revealed after a man came to the Prophet ﷺ, ashamed that he had kissed a woman he wasn't married to. The verse told him that prayer and good deeds wipe away such sins, and the Prophet ﷺ said it applies to all of his community who act on it (Sahih al-Bukhari 526). Allah even promises that for those who repent, believe and do good, He will replace their bad deeds with good ones (Quran 25:70).

What the Prophet ﷺ taught

He gave this simple advice: "Fear Allah wherever you are, follow a bad deed with a good deed and it will wipe it out, and treat people with good character" (Jami' at-Tirmidhi 1987).

He also said that the five daily prayers, Friday to Friday, and Ramadan to Ramadan wipe out the sins between them, as long as major sins are avoided (Sahih Muslim 233). So your ordinary worship is constantly cleaning your record.

Minor sins vs major sins

• Minor sins (a harsh word, a careless glance, small lapses): most scholars say good deeds like prayer, wudu, charity and dhikr erase them, even without a specific repentance for each one.
• Major sins (like drinking, zina, stealing or abandoning prayer): the majority of scholars say these need tawbah, which means stopping, regretting and intending not to return. Good deeds still help, but they don't replace repentance. See Will Allah forgive me if I keep committing the same sin?
• Wrongs against people (debts, stolen things, hurtful lies): these need to be returned or forgiven by the person. The Prophet ﷺ urged anyone who has wronged someone to settle it today, before a day when there is no money, only good and bad deeds (Sahih al-Bukhari 2449).

Small deeds count more than you think

You don't need grand gestures. Saying astaghfirullah, smiling at someone, helping a neighbour or giving a coin in charity are all good deeds that weigh on your scale. See Is a smile really charity in Islam?

And don't let a bad deed convince you that you're "too far gone". The whole point of this teaching is that the door stays open. See How do I let go of guilt from my life before Islam?