When you create a password for your Bitly account, we check to make sure that it hasn't appeared in other websites' and apps' data leaks. This check is done through a secure system that doesn't expose any of your data.
If the password you've entered has appeared in a data leak, you'll see this error: "Email/password combination appears in a data leak. Enter a different password." To check where the password was leaked, visit https://haveibeenpwned.com/Passwords.