Contact Status is a single select field that can be used as a way to track the lifecycle of your contact record status changes. For example, you may have a contact marked as a "Prospect" and would then like to track the lifecycle of how long it took for that record to go from being a prospect to a client.
Contact Type works differently than the Contact Status option. Read more about that here.
1. Under Tools & Settings, open Contact Settings
2. Scroll to the bottom of the page where you can add Contact Statuses
3. Enter in the contact statuses that fit your goal
4. Go back into Tools & Settings and select the Layout Designer to add the Contact Lifecycle to your contact record layout
5. Open a contact record, where you can then view your new statuses under the Contact Status field that sits in Contact Details
6. You can also view the Contact Lifecycle section wherever you decided to input it in your contact record layout. This information can be reported on using the Contact Lifecycle report view.