How many passwords do you have? These days, it seems a username and password or PIN are needed just about everywhere online. Dealing with passwords can seem to be a real hassle, but if hackers or scammers were to "get" or "guess" your passwords, your personal information, such as your financial information, health data, private documents, and more, would be at risk. Identity thieves could exploit access to your personal information to open credit card accounts in your name, apply for a mortgage, or pose as you in online transactions.

Do you need to improve your password security? Here are some techniques for creating stronger passwords and some best practices to increase your online security.

Creating Strong Passwords

It's easy to forget passwords, so people often use simple words, like a pet's name, or dates that are easy to remember, like a wedding anniversary. A hacker will try your name, children's names, birthdates, and pets' names as passwords to get access to your computer. When they get lucky, your ID, privacy, and financial security are all up for grabs.

To create a secure password that is easy to remember, follow these steps:

Do not use personal information: It is strongly recommended NOT to include any words related to your name or names of family members or pets. Also, don't include easily recognizable numbers like your address, phone number, or birthday.
Do not use real words: Password cracking tools are very effective at helping attackers guess your password. These programs can process every word in the dictionary, plus letter and number combinations until a match is found. Steer clear of using "real" words from the dictionary or proper nouns or names.
Mix character types: By combining uppercase letters with lowercase letters, numbers, and special characters such as "&" or "$", you increase the complexity of your password and decrease the chances of someone hacking into your system.
Longer is better: It is generally recommended that passwords be at least eight characters in length. Probability dictates that longer passwords are harder to crack.
Phrases are easier to remember: One tip is to think up a pass-phrase, like a line from a song, and then use the first letter from each word, substituting numbers for some of the letters. For example: "100 Bottles of Beer on the Wall" could become "10oB@b0tW".

Storing Your Passwords

Keeping a list of passwords on your computer is like keeping the keys to your house on your front porch. But how will you ever remember all your various passwords and phrases?

Don't write them down: Resist the temptation to hide passwords under your keyboard or post them on your monitor. Stories about hackers getting passwords by dumpster-diving and "shoulder-surfing" are absolutely real.
Use a password management tool: One way to store and remember passwords securely is to use a tool that stores your list of user names and passwords in encrypted form. Some of these tools will even help you out by automatically filling in the information for you on certain Web sites.

Using Passwords Safely

Once you know how to create strong passwords, here are several tips for how to use them effectively to increase your level of security.

Change passwords on a regular basis: Online financial accounts should be changed every month or two, while you may choose to change your computer logon password every quarter.
Use different passwords on different accounts: Don't use the same password on more than one account. If a hacker discovers it, then all of the information protected by that password could also be compromised.
Do not type passwords on computers you do not control: When using your laptop in a Wi-Fi Hot Spot or a computer in an Internet café, you want to avoid any actions that require a user name and password (like doing banking or online shopping) because your data could be intercepted over the wireless network or with keystroke logging devices.

Conclusion

Passwords are just one piece of the protection puzzle. To create a safer environment online, you will also want to use a firewall and other security products that help keep hackers out of your system and protect your identity online.