Shred cheddar cheese and dice 1/4 cup (1/2 stick of butter) into 1/2" cubes.
Add flour, cheese, butter, and salt to your food processor and blend until the mixture is consistent. Add water, 1 tbsp at a time, if the mixture seems too dry.
Take the mixture out of the food processor and mold it into a flat section, cover with plastic wrap, and cool for 20 minutes. You can leave the dough over night as well.
Remove the homemade goldfish cracker dough from the fridge and roll it flat - 1/4" thick. Press firmly into the dough to make your goldfish cracker cutouts using your goldfish cookie cutter. Place each goldfish cracker onto your parchment-lined baking sheet. If you'd like, sprinkle on the white cheddar popcorn seasoning and poke a small hole for the eye with a toothpick.
Bake homemade goldfish crackers for 8 to 12 minutes.
Let cool and store in air tight container or Ziploc bag for 5 to 7 days.