You must actively use them to add to this number. This does not include any souls you may have in your inventory. In a way, your current level can be viewed as a ticker for how many points you've assigned to your various attributes. Instead, you offer souls to the Fire Keeper to upgrade your attributes.
Unlike a typical role-playing game, you don't automatically level up in Dark Souls 3. Be sure to read our Dark Souls 3 covenants guide to learn about every covenant, your options and the rewards you can earn by pledging your allegiance.