In a large bowl, combine the shredded coconut, sweetened condensed milk, vanilla extract, and powdered sugar. Stir well until all ingredients are evenly combined into a thick, sticky mixture.
Using your hands or a small cookie scoop, roll the mixture into 1-inch balls. If the mixture is too sticky, chill it in the refrigerator for 10–15 minutes before rolling.
If desired, melt chocolate in a microwave-safe bowl in 30-second intervals, stirring each time. Dip each coconut ball halfway into the chocolate, then place on a parchment-lined tray.
Refrigerate the coconut cream balls for at least 30 minutes until firm. Serve chilled and enjoy!