Password attacks: 8 types & how to prevent them

When was the last time you thought about your company's password security? If you're like most IT managers, it was probably the last time you had to reset someone's forgotten password or dealt with the fallout of a data breach.

But the reality is, password attacks are happening all the time and they're only getting more sophisticated. Cyber criminals are constantly finding new ways to crack, steal, and guess passwords, and they're not just targeting big companies with deep pockets. Small and mid-sized businesses are increasingly in the crosshairs, too.

The good news is, you don't have to be a victim. By understanding the types of password attacks you're up against and implementing strong password policies and controls, you can significantly reduce your risk of a breach.

In this guide, we'll dive into the most common types of password attacks and show you how to defend against them. Let's get started.

What is a password attack?

At its most basic, a password attack is any attempt to obtain, steal, guess, or otherwise compromise a user's login credentials. The goal is to gain unauthorized access to systems, applications, or data that are meant to be password-protected.

Password hacking and attacks come in many different forms (which we'll explore in detail shortly). But they all prey on a simple fact: most people (including employees) are terrible at creating strong, unique passwords, creating a significant attack surface for threat actors to exploit.

Despite years of warnings from IT and security pros, the average user still defaults to weak, easily guessable passwords like "123456" or "password.” They reuse the same password across multiple accounts. They write their passwords down on sticky notes or share them freely with colleagues.

All of these bad password habits make it laughably easy for attackers to crack login credentials—often with little more than a few educated guesses. And once a hacker has a user's password, they can access any system or application that user has rights to. From there, it's just a matter of escalating privileges and moving laterally through the network until they find the data they're after.

The consequences of a successful password attack can be devastating. Depending on the type of data compromised, your company could suffer:

1. Financial losses

If attackers gain access to financial systems or customer payment data, they can steal funds directly or commit fraud that leaves you on the hook. According to IBM, the average cost of a data breach reached $4.88 million in 2024.

2. Reputational damage

Data breaches make headlines. If your company is caught with lax password security, it can shatter customer trust and tarnish your brand for years. Just ask companies like Equifax who are still dealing with the fallout of massive data breaches years later.

3. Regulatory fines

Data breaches resulting from weak password security can trigger significant regulatory penalties. Under GDPR, serious violations can lead to fines of up to 4% of annual global revenue or €20 million, whichever is greater. Under HIPAA, penalties vary based on violation level, ranging from $100 to $50,000 per violation (or per record), with a maximum annual penalty of $1.5 million per violation type.

4. Intellectual property theft

If competitors or nation-state actors get their hands on your company's trade secrets or proprietary data, you could lose your competitive edge. Stolen IP can be used to create knock-off products, underbid you on contracts, or even blackmail your executives.

The bottom line? Password attacks are a huge liability for businesses of all sizes. It's not a matter of if, but when your login credentials will come under attack. And if you're not prepared, the consequences could be catastrophic.

8 types of password attacks

Attackers use a variety of techniques to crack, guess, intercept, and steal passwords. While their methods are constantly evolving, most password attacks can be grouped into a few main categories:

1. Brute force attack

In a brute force attack, the attacker tries to guess a password by systematically trying every possible combination of characters until they hit on the right one. They often use automated tools to cycle through millions of password variations in a matter of seconds.

2. Dictionary attack

A dictionary attack is similar to a brute force attack, but instead of trying random character combinations, the attacker uses a pre-compiled list of common words and phrases. This allows them to crack passwords much faster than a pure brute force approach.

3. Phishing

In a phishing attack, the attacker tries to trick the user into voluntarily revealing their password. They often do this by sending a fake email or creating a spoofed login page that looks like a legitimate site.

4. Keylogger attack

A keylogger is a type of malware that records every keystroke a user makes, including their passwords. Attackers can install keyloggers through phishing emails, malicious websites, or physical access to a device.

5. Man-in-the-middle attack

In a man-in-the-middle (MitM) attack, the attacker intercepts communication between the user and a legitimate website or application. They can then capture any login credentials transmitted in plain text. This can be over an unsecured public Wi-Fi network, for example.

6. Credential stuffing

Credential stuffing is a type of targeted brute force attack that takes advantage of password reuse across multiple accounts. Attackers obtain a list of stolen username/password combinations from one data breach and then "stuff" those credentials into the login pages of other sites, betting that some users have reused the same password.

7. Password spraying

In a password spraying attack, the attacker tries a small number of commonly used passwords (like "password123") against a large number of accounts. This allows them to avoid account lockouts that might be triggered by too many failed login attempts on a single account. Attackers often target high-value accounts, such as administrator accounts or users with elevated privileges, as these offer greater access to sensitive data and systems.

8. Rainbow table attack

A rainbow table attack is a technique used to crack password hashes. Attackers pre-compute tables of password hashes and then compare them against hashed passwords obtained from a data breach or by other means.

As these categories illustrate, password attacks can take many different forms. Some are highly technical, requiring specialized tools and skills. Others are simple enough for even a novice hacker to pull off.

The common thread is that they all exploit weak, reused, or compromised passwords. And with the average user juggling dozens of login credentials across work and personal accounts, it's easy for attackers to find a way in.

How to prevent password attacks: 7 tips

So what can you do to protect your organization from password attacks? Here are some key best practices to put in place:

1. Implement multi-factor authentication

One of the most effective ways to prevent unauthorized access is to require more than just a password to log in. Multi-factor authentication (MFA) adds an extra layer of security by requiring users to provide a second form of verification, such as a code from an authenticator app or a hardware security key. With MFA in place, even if an attacker manages to guess or steal a user's password, they won't be able to log in without that second factor. Not all MFA methods are equally secure though—hardware keys and authenticator apps provide better protection than SMS-based verification.

2. Use strong, unique passwords

It sounds obvious, but using long, complex passwords that are unique to each account is still one of the best defenses against password attacks. Encourage your users to choose passwords that are at least 12 characters long and include a mix of upper and lowercase letters, numbers, and special characters. Avoid popular words or personal information that could be easily guessed. And never reuse passwords across multiple accounts—if one password is compromised, attackers will have the keys to all your other accounts as well.

3. Implement a password manager

Of course, creating and remembering strong, unique passwords for every account is easier said than done. That's where a password manager comes in. Password managers generate, store, and auto-fill complex passwords for each of your accounts. All the user has to remember is one strong master password to unlock their password vault. Many password managers also include features like password sharing, security alerts, and automatic password changes.

4. Conduct regular security training

Your users are your first line of defense against password attacks. But they can also be your biggest weakness if they're not properly trained on password best practices. Make sure your employees know how to create strong passwords, how to spot phishing attempts, and when to report suspicious activity. Conduct regular phishing simulations to test their awareness and reinforce good habits.

5. Use account lockout policies

To protect against brute force and password spraying attacks, set up account lockout policies that temporarily disable an account after a certain number of failed login attempts. This makes it much harder for attackers to systematically guess passwords without getting shut down. Just be sure to strike the right balance—if you set the lockout threshold too low, users may get locked out accidentally. But if you set it too high, attackers will have more room to try different password combinations. Consider using progressive lockouts that reduce allowed attempts over time, and always log failed login attempts to help spot attack patterns.

6. Consider passwordless authentication

If you really want to take your password security to the next level, consider ditching passwords altogether in favor of passwordless authentication methods like biometrics, security keys, or passkeys. Passwordless authentication relies on factors that are much harder to steal or guess than a traditional password, such as a fingerprint scan or a hardware token. And because there's no password to remember (or forget), it can actually be more convenient for users in the long run.

7. Monitor for compromised credentials

Even with strong password policies in place, there's always a chance that user credentials could be compromised in a data breach or phishing attack. That's why it's important to proactively monitor for compromised passwords and take action quickly. Use tools that scan dark web forums and data dumps for leaked credentials matching your company's email domains. If you find any matches, force those users to change their passwords immediately and investigate how the credentials were compromised in the first place.

Preventing password attacks in global work environments

For organizations with global workforces, preventing password attacks requires an extra layer of vigilance. With employees logging in from different countries and regions, you'll need to be especially mindful of:

• Regional compliance requirements: Different countries have different data protection laws that may impact how you manage and secure passwords. Under GDPR, while passwords are considered personal data, the focus is on secure storage practices—passwords must be properly hashed and salted, not just encrypted. Other regions like California (under CCPA) may have their own specific requirements.  Make sure your password policies align with the regulations in each of your operating regions.
• Localized threat landscapes: Attackers in different parts of the world may use different tools and techniques to crack passwords. They may also be more likely to target certain types of accounts or data. Stay up-to-date on the latest threats in each of your regions and adjust your defenses accordingly.
• Language and cultural differences: Password best practices may not always translate well across different languages and cultures. For example, a password that might be considered strong in English could be easily guessable in another language. Be sure to provide localized training and resources to help employees create strong passwords that work in their native language.
• Credential sharing across borders: In some cultures, sharing passwords with colleagues or family members is a common practice. But this can make it much harder to track who has access to what and increases the risk of password compromise. Make sure your password policies are clear and consistently enforced across all regions.

The key is to balance global consistency with local flexibility. Establish a strong foundation of password best practices that apply to all users, but be willing to adapt your approach to fit the needs and risks of each region.

Simplify password management with Rippling

Managing passwords across a global workforce is no easy feat. But with Rippling's powerful identity and access management tools, you can simplify and strengthen your password defenses without sacrificing user experience.

RPass, Rippling's built-in team password manager, provides centralized, secure, one-click access to all apps right from the Rippling dashboard. This lets employees remember just one password that meets your security requirements while keeping your organization secure.

In addition to password management, Rippling also offers:

• Customizable security policies with geographic and time-based restrictions
• Automatic user provisioning and deprovisioning across connected apps
• MFA options including platform authenticators and hardware security keys
• Integration with YubiKeys for hardware-based security authentication
• Behavioral detection to identify and block suspicious login attempts

By consolidating all your identity and access management needs into a single platform, Rippling makes it easy to adopt password best practices and stay secure. And with granular permissions and customizable workflows, you can ensure that the right users always have access to the right resources no matter where they're logging in from.

Password attacks FAQs

How do you detect a password attack on business systems? 

Look for warning signs like multiple failed login attempts, login attempts from unusual locations or times, or sudden changes in user behavior. Security tools can help by monitoring login patterns, flagging suspicious activity, and alerting IT teams to potential threats. Having audit logs and monitoring systems in place is essential for catching attacks early.

What are the best practices for enforcing strong password policies?

Start with basic requirements like minimum length (12+ characters) and complexity (mix of letters, numbers, and symbols). But don't stop there. Require regular password changes, prevent password reuse, and block commonly used passwords. Most importantly, use multi-factor authentication whenever possible. For critical systems, consider hardware security keys like YubiKeys which are more secure than traditional passwords.

What role does user education play in preventing password attacks?

Training is crucial but needs to be practical. Teach employees how to create memorable but strong passwords, recognize phishing attempts, and understand why security measures matter. Regular reminders and real-world examples work better than lengthy policies. 

Are password managers secure for protecting credentials?

Yes, reputable password managers are very secure when used properly. They're much safer than reusing passwords or writing them down. Modern password managers encrypt data, can generate strong unique passwords, and often include features like breach monitoring. The main risk isn't the password manager itself but protecting the master password that unlocks it, which is why combining it with MFA is important.

This blog is based on information available to Rippling as of December 23, 2024.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.