Being overly critical of oneself and developing a negative self-image is a sure-fire way to create a distorted self-perception. 
People with self-doubt are more susceptible to confirmation bias about their own incompetence. This subconscious phenomenon is like a reversal of the Dunning-Kruger effect, where people seem to wrongly believe that they are competent.

Negative Self-Assessment Is A Downward Spiral

While our moral values are relatively stable, our preferences can change. How we view our true self plays a big role in our self-worth.
Being faithful to our true self reduces complexity in a world that is complicated and always in flux. Our true self becomes the center of the wheel that is not going round and round like the circumference. That is why people move towards enlightenment, the path of self-realization.

Our Own True Self Is Good For Us

An attitude of personal growth (also called growth mindset) can be a way to learn, evolve and succeed in life. 
Self-knowledge is not a rigid piece of information but is a continuously changing process.

Developing A Growth Mindset

The Dunning-Kruger effect says that most incompetent people are not aware of their incompetence and have inflated self-esteem.
Believing we are better at something than we are in reality has an advantage: it makes us cope up with the daily ups and downs in a better way.

We Are Not As Competent As We Believe

Our desire to impress others leads to self-deception. To make sure that others are convinced about our truthfulness, capabilities and IQ, we ourselves have to be convinced first. Extensive studies show that our self-deception fluctuates depending on factors like how we believe others will perceive us.
We are also ready to deceive ourselves to come closer to our own perception about ourselves, which is kind of head-spinning!

Self-Deception Is Possible Without Us Realizing It

Self-image can be a self-fulfilling prophecy. We need to see ourselves as a process, an evolving individual who is adaptive, flexible and shape-shifting. If we see our traits (like willpower or IQ) as fixed, we won’t be able to improve upon those.
Example: Fear of failure can be the root cause of eventual failure.

You Are Mentally Flexible

<ul>
<li>We have certain unconscious inclinations and motives, a part of our personality that is hidden from us.</li>
<li>An extensive psychological experiment that examined the automatic, reflexive response in participants revealed that the image conveyed in surveys has little to do with the actual personality.</li>
<li>Questions that required automatic reactions showcased the habitual and spontaneous personality parts, whereas those requiring thought and reflection revealed a different personality.</li>
</ul>

Your Motives Are Unknown To You

Mindfulness meditation increases self-reflection and helps in overcoming two major hurdles: Distorted thinking and justification of our egoistic nature.
Meditation makes us remove our identification with the constant stream of thoughts, and simply observing the mind increases clarity. Imagination is also a powerful tool to manifest our desires.

Self-Reflection Helps Us Know Ourselves Better

Our outward appearance, hairstyle, clothes, behaviour (like averting a gaze or hand-wringing) indicates a lot to other people without our being conscious about it.
We are not always aware of our hand gestures, facial expressions and body language, and are blind towards the effect it has on others. A blinking eye, for instance, indicates stress, and a slump in one’s posture portrays how mentally burdened we are feeling.

Your Outward Appearance And The Perception Of Others

People who are insecure are the ones who are more aligned towards behaving in a moral, socially acceptable way. Those who are really sure that they are intelligent, good looking, generous or sociable are confident about themselves and make less effort to prove it to others.
However, too much self-assurance results in an inflated ego, which if fed constantly, takes us away from reality.

Insecure People Behave Morally

Our self-perception is completely distorted, according to psychological research. We do not know who we are, something known as ‘introspection illusion’. Further complicating matters is the fact that we do not realize this and think about ourselves as somebody who we are not.
Our self-image, it seems, is affected by biases, illusions and processes that remain in the unconscious realm.