Cedarwood oil can be applied directly to your skin but some people experience irritation when they apply cedarwood or any other essential oils directly to their skin.
So it's always best to dilute the Cedarwood oil or any other essential oils with a carrier oil before you apply it to your skin to prevent rashes and skin irritation.
You can also add about 10 drops of Cedarwood oil to bath water which can help your skin too.
Some carrier oils you can use to dilute the Cedarwood essential oil with are coconut oil, olive oil, grapeseed oil, Moringa Oil and Jojoba Oil.
Mix a little bit of one of those carrier oils with the essential oil and you won't get irritation or rashes from the essential oils.