The word "cholesterol" can refer to two different things:

• Dietary cholesterol, which is the cholesterol contained in food
  
  
• Blood cholesterol, which is referred to when you talk about "cholesterol levels" in your body. Blood cholesterol is a natural fat produced by your liver and found throughout your body. It is a soft, white, waxy substance. There are two different types of blood cholesterol. Low-density lipoprotein (LDL or “bad” cholesterol) high levels of which are a risk factor for heart disease, and high-density lipoprotein (HDL or “good” cholesterol) which can help reduce the risk of heart disease.
  

Though often thought of in negative terms, cholesterol is very important to your overall health. For example, cholesterol is used to maintain healthy cell walls, and to make hormones, vitamin D, and bile acids.

The problem with cholesterol is that you can easily have too much of it. 

Your liver already makes around 1000 mg of blood cholesterol per day, which is almost all your body needs. So, when you consume too much dietary cholesterol as well (mainly from foods high in saturated fat), your body has too much.

The fats then build up in the walls of your arteries, eventually narrowing them and blocking the flow of blood. If oxygen can’t get through to your heart due to clogged-up arteries, you begin to suffer chest pain. When there is a complete blockage, the result is a heart attack.