Mercy means in the Hebrew kindness and favour, and truth means stability, faithfulness. The Authorised Version translators have got it perfectly here.
Here are other conditions which must be honoured if we would seek deepening of character and insight, perception, wisdom. Here are the conditions. Mercy and truth, which means here faithfulness, must never leave us. All our thinking must be dominated by mercy and truth. If it is not, what happens is this: the way we look at life is blighted immediately. Every problem we encounter is taken too seriously. Every difficulty is faced as though it is entirely up to us to get through it. Every injustice hurts us, wounds us. So immediately we become self-dependent and we become people who are subject to self-pity, to anxiety and all those things are enemies of wisdom. If only I can keep mercy and truth in mind, then instead of becoming petty in my outlook, I shall be more than conqueror, I shall have a broader outlook, I shall be resilient and capable of taking knocks. I shall never lose sight of the fact that I am a privileged child of God with the promises and the faithfulness of God flowing towards me all the time. Now you see that is essential to wisdom.