Compromised credential attacks happen when cybercriminals use stolen usernames and passwords to access systems they shouldn’t be able to reach. This approach bypasses most security defenses because the credentials appear valid to authentication systems.

For companies, understanding these attacks is critical. They’re one of the primary ways hackers break into company networks, steal sensitive data, and launch ransomware attacks. This guide will explain how these attacks work, why they’re so effective, and most importantly, how you can protect your company from them.

Key takeaways

• Compromised credential attacks use stolen usernames and passwords to impersonate legitimate users, allowing hackers to bypass traditional security measures undetected.
• These attacks represent one of the most common methods cybercriminals use to gain access to corporate networks and systems.
• Cybercriminals obtain credentials through multiple attack vectors, including phishing campaigns, data breaches, infostealer malware, and social engineering tactics.
• Poor password practices, like reusing the same password across multiple accounts, can turn a single breach into widespread account compromise.
• Multi-factor authentication, behavioral monitoring, and proactive credential management create effective barriers against these attacks by adding verification layers and detecting unusual access patterns.

What are compromised credential attacks?

Compromised credential attacks happen when unauthorized individuals gain access to legitimate credentials and use them to infiltrate user accounts as if they were the rightful owner. Instead of breaking down cybersecurity defenses, these attacks exploit the trust that companies place in valid login credentials.

Compromised credential attacks often involve credential stuffing, where hackers use automated tools to test stolen credentials across multiple websites and services. Since many people reuse the same password in many locations, one compromised account can lead to many more.

Have I Been Pwned, an independent breach notification service, tracks nearly 15 billion compromised accounts in its database⁽¹⁾, demonstrating the massive scale of credential theft affecting internet users worldwide.

Why are compromised credential attacks dangerous?

Compromised credential attacks are dangerous for companies because their consequences are so severe. Attackers can use compromised credentials to access email accounts, networks, servers, websites, or any other type of digital asset. This is called a corporate account takeover. The types of threats it enables include:

• Holding sensitive data for ransom
• Conducting account takeover attacks
• Installing malware
• Stealing corporate data
• Conducting new account fraud
• Transferring funds
• Buying goods or services
• Committing loan fraud
• Disrupting normal business operations

Companies that fall victim to a compromised credential attack can incur large financial losses because of a direct loss of funds but also because of the costs associated with mitigating the breach. For example, any kind of downtime can result in a considerable loss of revenue.

Companies may also face legal liabilities related to penalties for not properly securing personal information. Data breaches often violate laws such as GDPR, HIPAA, and the California Consumer Privacy Act (CCPA).

A compromised credential attack can also cause significant reputational damage. Customers and suppliers may refuse to continue doing business with companies that cannot keep their data secure from cyberfraud. This is the least obvious type of risk, but often the biggest one too. It’s extremely hard to rebuild lost trust.

How do attackers obtain compromised credentials?

Cybercriminals use several methods to steal credentials, often combining multiple approaches like credential harvesting or brute force attacks for maximum impact.

Phishing attacks

Phishing remains the most common way to steal credentials. Attackers create fake websites or emails that trick people into entering their login information because they impersonate trusted organizations like banks, social media platforms, or even internal company systems.

Modern phishing attacks are sophisticated. They might copy the exact look of a legitimate login page, complete with logos, fonts, and layouts that match the real site perfectly. Fraudsters also create urgent scenarios that pressure people into acting quickly without thinking, such as fake security alerts claiming “your account will be locked in 24 hours.”

Infostealer malware

Infostealer malware has exploded in popularity among cybercriminals as an efficient way to harvest credentials at scale. These malicious programs silently extract saved passwords, browser data, and authentication tokens from infected devices. They’re often distributed through malicious downloads, email attachments, or compromised websites.

Unlike traditional malware that might slow down your computer or display obvious signs of infection, infostealers are designed to remain completely hidden while they work. They target browser password managers, saved login forms, cryptocurrency wallets, and sometimes session cookies that keep you logged into websites.

Data breaches

When companies experience data breaches, customer credentials often end up for sale on dark web marketplaces. These breaches expose vast databases containing usernames, passwords, email addresses, and other personal information that cybercriminals can then exploit for years to come.

RockYou2024 serves as a prime example of how massive these data breaches can become. Discovered in July 2024, this was a compilation of stolen data from thousands of previous incidents spanning from 2021 to 2024. The collection contained 10 billion unique passwords gathered from an estimated 4,000 different databases⁽²⁾, making it one of the largest stolen password collections in history.

Keyloggers and surveillance tools

Keylogging malware records every keystroke on a device, capturing passwords as users type them. These tools can be installed through malicious email attachments, infected software downloads, or physical devices plugged into USB ports when an attacker has temporary physical access to a computer.

The stolen information is typically transmitted back to attackers through encrypted channels, often disguised as normal web traffic to avoid detection. Some keyloggers can remain dormant for months, collecting credentials from multiple users on shared computers before sending bulk data to criminal servers.

Ransomware

While ransomware is primarily known for encrypting files and demanding payment, many ransomware operations also focus heavily on credential theft as both a means to an end and an additional revenue stream. Modern ransomware groups often steal credentials before deploying their encryption payload, giving them multiple ways to monetize their access.

Some ransomware groups operate “double extortion” schemes where they threaten to publish stolen credentials and other sensitive information if the ransom isn’t paid. These credentials are often sold on dark web marketplaces regardless of whether the victim pays, creating ongoing security risks long after the initial ransomware incident is resolved. The stolen credentials can then fuel future attacks against the same company or be used in credential stuffing attacks against other targets.

Recent examples of major credential attacks

PowerSchool breach (2025)

In December 2024, a single compromised credential led to one of the largest education data breaches in history. An unknown hacker used stolen login information to access PowerSchool’s customer support portal, then leveraged that access to breach the company’s school information system⁽³⁾.

The attack demonstrates how a single stolen credential can have massive consequences at scale. Despite PowerSchool paying a ransom to prevent data publication, schools are now facing additional extortion attempts from other criminal groups who may have obtained copies of the stolen information.

Microsoft Midnight Blizzard attack

Russian state-sponsored attackers used leaked credentials to infiltrate Microsoft’s corporate email system, accessing sensitive communications with U.S. federal agencies. The attack, attributed to the group known as Midnight Blizzard (also called NOBELIUM), began with a password spray attack against a legacy test account that lacked multi-factor authentication.

Once inside Microsoft’s systems, the attackers used their initial access to steal additional credentials and OAuth tokens, allowing them to impersonate legitimate users and access executive email accounts. The breach went undetected for several months, during which the attackers accessed communications between Microsoft and various U.S. government agencies.

The attack demonstrated how nation-state actors use compromised credentials for espionage rather than financial gain. By using valid credentials and moving slowly through the system, the attackers avoided triggering security alerts that might have detected more aggressive intrusion attempts.

How can you detect compromised credential attacks?

Early detection is crucial for minimizing damage. Here’s what to watch for:

Unusual login patterns

• Access from unexpected geographic locations
• Login attempts at odd hours
• Multiple failed login attempts followed by successful access
• Access from unrecognized devices or IP addresses

Behavioral anomalies

• Users suddenly accessing systems they don’t normally use
• Unusual data download or transfer activity
• Changes to account settings or permissions
• Suspicious email activity from compromised user accounts

Technical indicators

• New devices registering on the network
• Unusual network traffic patterns
• Unexpected configuration changes
• Security alerts from authentication systems

How can you prevent compromised credential attacks?

While hackers will always be able to obtain stolen credentials one way or another, there are measures that companies and individuals can take to protect themselves from this type of cybercrime.

Implement robust cybersecurity measures

Multi-factor authentication (MFA) should be your first line of defense against credential abuse. MFA adds an extra layer of security that makes it much harder for attackers to use stolen credentials. Even if they have your password, they still need access to the second authentication factor, such as a phone app, text message, or hardware token. This single measure can stop the vast majority of credential-based attacks.

Strong password policies are the foundation of credential security. Ask employees to use unique, complex passwords for each account, combining uppercase and lowercase letters, numbers, and special characters. Passwords should be at least 12 characters long, and commonly used passwords or personal information should be prohibited. Regular password resets are important, but avoid overly frequent changes that encourage users to create predictable patterns.

Risk-based authentication takes security a step further by analyzing the context of login attempts. Modern systems can evaluate factors like location, device, time of day, and user behavior patterns to determine when additional verification is needed. If someone tries to log in from an unusual location or at an odd time, the system can automatically require additional authentication steps.

Single sign-on (SSO) reduces password fatigue while improving security oversight. SSO allows users to access multiple applications with one set of credentials, reducing the number of passwords they need to remember and manage. This decreases the likelihood of reused passwords and gives security teams centralized control over access permissions, making it easier to quickly revoke access when needed.

Quickly respond to compromised credentials

Automated monitoring systems provide the continuous vigilance needed to catch attacks in real time. Anti-bot solutions use machine learning and artificial intelligence algorithms to establish baseline behavior patterns for each user and automatically flag anomalies that might indicate credential abuse. These systems can detect credential stuffing attempts, bot activity, and other automated attacks that human analysts might miss.

Immediate response is essential when compromise is detected. Reset passwords of the affected accounts immediately to prevent further unauthorized access. Revoke active sessions to ensure attackers can’t maintain access through existing login tokens. Document the incident thoroughly and investigate whether the compromise has spread to other accounts or systems. Quick action can often prevent a minor credential compromise from escalating into a major data breach.

How does DataDome protect against credential attacks?

DataDome provides real-time protection against compromised credential attacks with its advanced behavioral analysis and machine learning. Our platform monitors all login attempts and user activity to identify suspicious patterns that indicate credential abuse.

When DataDome detects potential credential stuffing or other suspicious login activity, it can automatically block the attack while allowing legitimate users to access their accounts normally. This protection works seamlessly in the background without affecting the user experience.

DataDome’s behavioral analytics can distinguish between legitimate users and attackers even when they’re using valid credentials, helping organizations stop attacks before they cause damage. To learn more about how DataDome can protect your company from compromised credential attacks, schedule a live product demo.

References

1. https://haveibeenpwned.com/PwnedWebsites
2. https://www.itgovernance.co.uk/blog/rockyou2024-nearly-10-billion-unique-plaintext-passwords-leaked
3. https://www.powerschool.com/security/sis-incident/
4. https://www.microsoft.com/en-gb/security/security-insider/midnight-blizzard