Cholesterol is a lipid. It is basically a steroid and is synthesized in the body as well as ingested as food. Steroid hormones are derived from cholesterol as are various other steroids in the body.
Dietary cholesterol is a waxy, fat-like substance found in foods that come from animals. While cholesterol is needed for normal body function, your liver makes enough for your body's needs so that you don't need to eat any cholesterol at all. This is the reason when excess cholesterol rich foods are eaten the blood cholesterol level rises and causes health related problems.
Fat cannot be avoided in the food we eat , however we can try and lower the bad cholesterol that causes hardening of arteries and heart disease by eating fat that has is not saturated or unsaturated fat. This type of fat is less harmful. When buying oil do look at the label and choose mono-saturated fat (MUFA) over polyunsaturated Fat (PUFA).