Is it considered cheating when...?

To start off, let me describe a few things: My fiancé and I have been living together for the last 3 months. We share the same room and the same bed. My room has that 70’s puke green carpet, ugly flower wall paper, a dresser that was hand made by my great grandfather (so no one else would have that same dresser) and the bed has red sheets. My fiancé is a red head.

For the last few months this girl named Katelynn has been texting him and he continuously asks her to leave him alone. Before my fiancé and I started dating, Katelynn was trying to get him to have three somes with her and this other girl Amy. A lot of drama started over that between the two girls and frankly, he really doesn’t like either of them in that way. At least that’s what I thought.

Yesterday, Katelynn texted my fiancé asking him if he could get her weed, but he’s just recently quit smoking marijuana, so he told her no and asked her to leave him alone. But she wouldn’t leave him alone. She bothered him the whole rest of the day. My fiancé told her to leave him alone or he’d call the police. Then she finally said, “I think it’s time for Georgia to know about the d* picture you sent me.” I was right next to him when she said that and I thought she was just making it up… until she sent the picture that was supposed to be of his penis to his phone.

My fiancé denies it’s a picture of his penis… but, there’s no way it’s anyone else’s. My dresser, sheets, carpet, and wall paper are in the picture set up the same way as they are in my room. So, there’s no doubt it’s my room. And the pubes of the guy in the picture are red… and my fiancé is the only red head I know…

So, my questions are:

1. If my fiancé sends a picture of his penis to another girl, is it cheating?
2. If it is cheating, should I forgive him and work things out? Or Should I throw it in his face and kick him out?