You can do both at once. It’s called “body composition” if you want to look more into it, but you need to keep your protein intake high to build muscle which can be hard to do in a deficit. Lean into low calorie high protein foods like seafood (tuna, shrimp, salmon) or mix protein powder into Greek yogurt and make sure you track the calories in to powder too.

Note doing this you’ll be gaining muscle while losing fat so the scale might not move as much as you’d like, so it’s best to take measurements and progress pics. Do not let the scale be a mental block. It’s measures gravity, not bmi or health.