Thick and creamy in texture, this soup is basically made with cheddar cheese, water and flavorings. It is a type of soup most often prepared for use as an ingredient in other recipes rather than a soup to be served with sandwiches or salads. Although it can be served like a traditional soup, Cheddar Cheese Soup is commonly used as an ingredient in fondues, sauces for pasta and meats, or prepared as a base for various snack dips.