Step 2 is appropriate remorse and regret over the wrong. Step 3 is resolving to avoid repetition. The guilt we're talking about here though, is of the destructive sort . It, too, begins with an admission of wrongdoing. But now, instead of appropriate regret and a firm resolve to avoid repetition, we viciously attack ourselves and end up feeling spent and miserable.
Guilt is actually anger turned inward.
I'm a lousy mother. Rav Wasserman has compared teshuva to a cleaning establishment. When we blame ourselves and tell ourselves we're no good, it's like throwing out the suit. We don't need to do that. Yet nowhere in the Torah do we find any such requirement for perfection.