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There are other individuals who are just at the beginning of their workout routine, and are making great strides in weight loss, that are still considered unfit because they are fat. This is not the case. Your body recognizes the improvements you make to overall cardiovascular health and many other health benefits associated with exercise, long before you manifest physical results.
Many individuals that look "fat" are actually very physically fit, and are simply waiting for their physique to catch up to the rest of their body.
Bear in mind that just because you might fall into one of these categories, it isn't time to dial down your fitness routine or jump back on the sofa. While being fat and fit is possible, reducing your weight to one that falls within a recommended range for your height will decrease many additional health risks, like diabetes, high cholesterol, heart disease stroke and joint problems.