How Do Password Managers Work?

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One of the most annoying things about technology is having to remember so many different passwords for different accounts. Plus, each account probably has its own rules, like you must have special characters, you can’t have numbers, no repeated letters, and more, making it even harder to remember everything. And the process of resetting your password is less than fun, especially because you’re probably just going to forget it again!

Password managers make it easy to access your accounts by remembering your passwords for you, in a secure fashion of course. They’re also great for storing important or sensitive information, and even automatically filling out web forms for you! But how exactly do they work? This article takes you through a password manager’s entire process, from checking to make sure your passwords are strong to alerting you if your credentials have been compromised.

Password Manager Features

Enpass Dashboard

Now that we have a basic idea of what a password manager does, how exactly does it work? Let’s get into it.

Sync Across Devices

Sync passwords across all devices

In a nutshell, the purpose of a password manager is to store and sync all of your passwords across all of your devices. Of course, not every password manager subscription works for an unlimited amount of devices or passwords, so this is something to look for when you’re shopping around.

Master Password

Master Password

Instead of having to remember dozens of different passwords, you’ll use the same master password for all of your accounts. Boom, now you never have to click on the dreaded “forgot password” button again!

Auto Fill on Forms

Auto-Fill Forms

All of the password managers that I’ve looked at also have the ability to automatically fill in forms for you with your basic information including name, birthday, address, and more. This isn’t directly related to managing your passwords, but it’s definitely a helpful feature that no password manager is missing.

Auto Login

Dashlane Automatic Login. Photo provided by Dashlane.

While some password managers have you type in a master password, others will log you in automatically once they’ve verified your identity (more on authentication later).

Security Breach Alerts

With most password managers, you’ll be alerted if any of your accounts have been compromised so that you can change your password as quickly as possible.

Inputting Passwords into Password Manager

Password Boss Import Passwords

To begin setting up your password manager, first you have to enter in all of your usernames and passwords. You can either do this manually or import them from a browser or file, depending on the password manager as well as the information you have.

Password Strength Report

Zxcvn Password Strength Meter

Once all of your data is in, your password manager will give you a strength report, pointing out any passwords that are old, repeated, or weak. Some password managers use Zxcvbn to rate passwords based on a scale of 0 to over 100.

Password Generator

Password Generator

For the passwords that aren’t up to snuff, you’ll replace them using a password generator. That’ll come up with passwords that are super long, complicated, and in general hard for hackers to guess. Some password managers can change your old passwords automatically, although this is rare. It’s also rare that password managers allow you to change multiple at once, although this makes the process much faster.


Two-Factor Authentication

Next, you should set up either two or multi-factor authentication for all of your accounts. Two-factor authentication means that when you’ll log in, you’ll also have to enter a numerical passcode, sent to your mobile device. For the most security, multi-factor authentication uses biometrics like fingerprint or facial recognition, ensuring that the right person is opening your account. Although these processes make logging in a bit longer, they are 100% necessary to prevent unauthorized usage of your accounts.

Emergency Contact

Password Boss Emergency Contact Feature

Not all password managers have this feature, but it’s really useful if you forget your master password. In that case, you’ll have a designated person who can get you access to your vault so you don’t have to start from square one again. Without an emergency contact, you may have to create a completely new account, as you won’t be able to access your old vault.

Multiple Users

Sharing passwords securely with a password manager
Sharing passwords securely with a password manager

Some password managers allow for multiple users if you want to securely share a password or another file. This makes sharing information much safer than if you were to email it, as the data would be unencrypted and thus very vulnerable for hackers.



Of course, no password manager would be complete without encryption, basically coding all of your data so that only you can access it. The current encryption standard is AES-256, which stands for Advanced Encryption Standard in 256 bits. All of the information in your vault will be encrypted, including your usernames, passwords, and anything else you choose to store in it, be it your financial information, social security number, or any sensitive photos or files.

Password Manager Extras

That’s it for the basic features of a password manager, but some companies take it a step further. While none of these features are necessary for the essential task of storing and remembering your passwords, they are helpful features to boost your web security.

Receipt Capture

Dashlane Receipt Capture. Photo provided by Dashlane.

No one knows better than me about the dangers of online shopping, one being how fun it is! But keeping track of your online purchases can be difficult, especially if you’re shopping on a bunch of different sites. That’s why some password managers add on a receipt capture that will automatically save all of your online receipts in your vault. Because what you buy online is something that you should keep track of— trust me, your bank account will thank you.

Inbox Scan

Dashlane Inbox Scan. Photo provided by Dashlane.

We’ve all been guilty of lazily sending our account credentials over email— what’s the harm? Unfortunately, if a hacker breaks into your email, this makes it really easy for them to access your other accounts. Some password managers will scan your email’s inbox for you, alerting you of any credentials. From there, you can change your passwords so that they won’t be compromised. Phew!

Dark Web Scan

BreachWatch Dark Web Scan. Photo provided by Keeper.

If you don’t know what the dark web is, consider yourself lucky. Basically, it makes up about 6% of the web, only accessible through a special software. Since all of its users are anonymous, it’s a hotbed of cyber crime, with millions of stolen credentials floating around. I prefer password managers that provide a dark web scan, making sure your passwords haven’t been compromised or alerting you to change compromised passwords.


How VPNs Work

If you’ve been on this website before, then you might already be familiar with VPNs, which stands for Virtual Private Network. VPNs encrypt your web traffic in a tunnel to make sure that you’re safe while on a public Wi-Fi network. I’ve only seen a couple of password managers that provide VPNs, but it’s definitely a welcome addition.

Credit Monitoring

Dashlane Credit Monitoring. Photo provided by Dashlane.

Finance may be stressful, but what’s more stressful is having your identity stolen. To protect against identity theft, some password managers provide credit monitoring for free or for an additional price. You’ll be alerted of any changes to your credit score or any activity, so if someone does steal your identity, you’ll know right away and can change your credentials.

Identity Theft Insurance

Dashlane Identity Theft Insurance. Screenshot from Dashlane website.

In the event that your identity does get stolen, despite the security measures in place, I’ve seen some password managers offer identity theft insurance. However, this is really rare, so you shouldn’t expect it while shopping for a password manager.

Travel Mode

1Password Travel Mode

You’re on your way to the airport, and your mind is filled with check lists. Sunscreen? Check. Flip flops? Check. Protection for your devices so that the TSA can’t access your accounts? Probably not something you thought about before hopping into the taxi. Fortunately, some password managers have a travel mode that locks your accounts for temporary periods of time so that no security personnel can view your web traffic or personal information. This feature is especially useful for someone that travels often, but it is certainly rare when it comes to password managers.

Password Manager Storage

Cloud Storage vs. Local Storage
Cloud Storage vs. Local Storage

At its core, a password manager is a form of storage. Most password managers back your footage up in two ways: locally on the device itself and in a cloud. There may also be options for local storage only, if you prefer. While some password managers give their users only one GB of storage, some give an unlimited amount. It’s important to make sure that your password manager has enough storage for all of your usernames, passwords, and any other files or data that you want to keep private.

Password Manager Apps

The Dashlane App

On each device that you want your passwords synced, you’ll need to download an app. The app is where you’ll store your passwords, create new one, share passwords with multiple users, receive security alerts, and more. Make sure that your password manager has an app for all of the devices you’d like to use it on, as well as a browser extension for your preferred browser. It’s also important to check the ratings and make sure that it’s user-friendly.


And that’s the entire story of how password managers work! Feel free to leave any questions below and I’ll be sure to answer them as soon as possible.

Gabe Turner

Gabe Turner

Gabe Turner is an attorney and journalist with a passion for home tech and secure, efficient living. Since graduating from NYU Law, he has maintained a paradoxical existence of trying to live life adventurously while remaining staunchly risk-averse. He is torn by the dual desires of wanting to only be in Brooklyn writing about housing policy and smart home tech and aspiring to visit his friends scattered across the globe. Gabe believes that stable, safe communities are the cornerstone to a vibrant and healthy society, and it is this passion that brought him to contribute to Security Baron.