Sounds like the file does NOT have an account with matching account name and password. Perhaps the password was capitalized differently or some other small difference is at work here. Keep in mind that FileMaker makes User Names and Account Names a confusing topic. Account names are specified in Manage Security and are what you need to enter to log in to a file. User names are specified in Edit Preferences. But then FileMaker confuses the topic by automatically entering the current User Name as the default Account name when the password dialog opens. So sometimes people think that they have the account name that they need when what they actually have is a user name that does not match to an account and they get an error until they figure out that the need to change the default to an account name that actually works.
These are just guesses, but odds are very, very high that you have a file that needs to open that requires credentials different from what was used to open the first file and that is different in some way from the credentials that you are trying to use to open it.
I have been using correct Account name (not user name) to enter and I have reset passwords and also deleted and created new "Full Access Privilege" accounts for both the databases but neither of them worked. I tested if I entered the correct password by accessing the actual "Customer" database file. So it lets me open the Customer database layout with the same credentials.
It's unlikely, but the file could be damaged. You could pull a copy down of the server and run a recover on it to see what is reported.
Make sure that the copy of the file on which you are resetting the password is the same copy that the system is trying to open. Not trying to insult you here, but sometimes you have another copy floating around and the external data source refers to it instead of the copy that you think you need to open, have to check for the obvious "oopses" along with the more esoteric ones.
After digging in a bit, I found out that the database was related to external data sources with three file paths and one of them using "*" (wildcard) path. The first path was pointing to the file in developer's local windows machine (dev's mistake) and second was set as fmnet:/*/Customer which I changed to fmnet:/HostIP/file location suggested by filemaker original documentation and that worked.
Reference: Creating file paths
Learned something new