Impaired goal-directed behavior is associated with a range of mental disorders, implicating underlying transdiagnostic factors. While compulsivity has been linked to reduced model-based (MB) control, impulsivity has rarely been studied in the context of reinforcement learning despite its links to reward processing and cognitive control. This study investigated the neural mechanisms underlying MB control and the influence of impulsivity and compulsivity, using EEG data from 238 individuals during a two-step decision making task. Single-trial analyses revealed a modulation of the feedback-related negativity (FRN), where amplitudes were higher after common transitions and positive reward prediction error (RPE), indicating a valence effect. Meanwhile, enhanced P3 amplitudes after rare transitions and both positive and negative RPE possibly reflect surprise. In a second step, we regressed the mean b values of the effect of RPE on the EEG signals onto self-reported impulsivity and compulsivity and behavioral MB control (w). The effect of RPE on FRN-related activity was mainly associated with higher w scores, linking the FRN to MB control. Crucially, the modulation of the P3 by RPE was negatively associated with compulsivity, pointing to a deficient mental model in highly compulsive individuals.