Although finding a lump under your skin is alarming, most of the time they’re harmless. Cysts and tumors can be hard to tell apart as they are often found in the same places. There are distinctions between the two, however: a cyst is a small sac filled with fluid, while a tumor can usually be described as a solid mass. Both cysts and tumors can appear on the skin, or over tendons, nerves and/or bones.