In a large pot over medium-high heat, add the ground beef and cook, breaking it apart with a spatula for about 5-7 minutes until browned. Drain any excess fat.

Add the chopped yellow onion to the pot and cook for 5-7 minutes until the onion is translucent. Stir in the minced garlic, and sauté for an additional minute until fragrant.

Pour in the beef broth, diced tomatoes, and diced green chilies, mixing thoroughly. Season with dried Italian seasoning, salt, and black pepper to taste.

Incorporate the cubed potatoes and shredded carrots into the pot, stirring well to combine.

Bring the soup to a boil, then reduce the heat to low and cover the pot. Let it simmer for 15-20 minutes.

Once the potatoes are cooked, remove the pot from heat. Add the softened cream cheese and whisk until smooth.

Pour in the milk, stirring until well combined and creamy.

Add the shredded cheddar cheese to the pot, stirring until melted and well combined.

Ladle the soup into warm bowls and top with extra cheddar, crispy bacon crumbles, sour cream, and sliced green onions if desired.