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Cholesterol is a substance in the human body that is needed for building and regulating cells. Most people are familiar with the term, however, because of the fear of 'high cholesterol' and indeed, too much of the wrong kind of cholesterol is actively bad for you. The compound can be ingested in the food we eat, but most of your body's store is made in the liver and other organs and circulates in the bloodstream, where it does its work.
The story becomes confusing because there are actually two types of cholesterol, only one of which is bad for you - Low-Density Lipoproteins (LDL), frequently referred to as 'bad cholesterol'. LDL is the substance that carries the building materials around the body to wherever they is needed. If you have too much LDL, it can line the artery walls in your bloodstream, forming 'plaque' and making your arteries narrower and less efficient at moving blood around. Plaque on the artery walls can, if left untreated, lead to a heart attack or stroke if it interferes with blood flow to the heart or brain.
On the other side of the equation are the High-Density Lipoproteins (HDL), which have the opposite effect on levels of this substance in your system. HDL also circulates through the bloodstream, but round up excess LDL and take it back to the liver to be processed out of your system. Hence, the amount of cholesterol in your system isn't as meaningful as the relative amounts of the types you have.
Watching the amount of cholesterol you consume - say, by limiting egg consumption - can have some small effect on your total levels, but since you produce around 75% of the total, that's often not sufficient. Fortunately, some foods actually increase your level of HDL, and adding these foods to your diet can increase your HDL. This in turn can help decrease your LDL, as the HDL gets to work cleaning it away.
Olives, olive oil, and most nuts and nut oils - the monounsaturated fats - all increase your HDL and lower your LDL. Other vegetable oils - the so-called polyunsaturated oils such as corn and safflower oils - also increase HDL and lower LDL, if not as effectively as the monounsaturated fats. Saturated fats, which usually come from animal products, such as meat, milk and cheese, raise both kinds of cholesterol.
The real villains of the story are the trans-fats. These often go by the name partially hydrogenated, and are laboratory creations meant to keep 'tub' margarines firm. They are widely used in commercial baking, and they raise your level of LDL (bad) and lower the level of HDL (good). If you make a habit of reading grocery labels, you will discover how many of the products we consume are laden with trans-fats. Removing these from your diet is a good first step to making sure you don't have to deal with the health issues associated with high levels of LDL later on.