Preheat your oven to 180°C (350°F) and lightly grease a baking dish with a thin layer of oil or butter, making sure to coat the base and sides evenly so the dip doesn’t stick and can be served easily later.
In a medium mixing bowl, add the softened cream cheese and sour cream, then use a spatula or whisk to mix thoroughly until the mixture becomes smooth, creamy, and completely lump-free; taking a minute here helps create a silky texture in the final dip.
Add the garlic powder, paprika, salt, and black pepper into the bowl, then stir well so the seasonings are evenly distributed throughout the creamy base, ensuring every bite is flavorful.
Fold in the cooked shredded chicken and mix gently until the chicken is fully coated and evenly combined with the cream mixture, making sure there are no dry spots or clumps.
Transfer the mixture into the prepared baking dish and spread it out evenly using a spatula, smoothing the surface so it cooks uniformly in the oven.
Spoon the sugar-free salsa evenly over the top layer and gently spread it out to cover the surface, being careful not to mix it too deeply into the base so you maintain distinct layers.
Sprinkle the shredded cheddar and mozzarella cheese evenly over the top, making sure to cover the entire surface for a rich, gooey, and evenly melted cheese layer.
Place the baking dish into the preheated oven and bake for 20 to 25 minutes, or until the dip is heated through, bubbling around the edges, and the cheese on top is fully melted with a light golden color.
Remove the dish from the oven and let it rest for a few minutes so the dip thickens slightly and becomes easier to scoop, then serve warm with your favorite keto-friendly dippers or allow it to cool and store in an airtight container for later.