Place the cream cheese and butter in the bowl of an electric mixer.On medium, blend for about 2 minutes until they cream cheese and butter are thoroughly combined.
Add the vanilla and mix again.
Add your powdered sugar in batches. This is only so your sugar doesn't explode all over the kitchen (it's no fun to clean up!) Put a third of the powdered sugar bag in the bowl and turn the mixer on on its lowest setting until the sugar incorporates, then add more sugar.
Once you have all the sugar in the bowl, turn the mixer on high for about 2 1/2 - 3 minutes. This will whip air into the frosting and make it nice and fluffy!