The following is just some random advice derived from my experience on dealing with email-related issues.
More specifically, here I'll be referring to exim (a very popular mail daemon), Cpanel/WHM & CentOS.
- Check if the user & password combination is correct.
- Check if the SMTP Authentication is enabled.
- Check if the User's mailbox is full.
- Perform an nslookup of the domain thru a public DNS Server.
- Perform an nslookup of the MX RRs thru a public DNS Server.
- Verify that the SPF RR is applied to the domain.
- Telnet (or putty with the telnet option enabled) to the destination server address to see if it answers.
- Check if the domain name is present inside /etc/localdomains.
- Check the logs with exigrep /var/log/exim_mainlog.
- Check with vi /etc/userdomains
Look for some blank spaces or broken lines near the domain that is having incorrect authentication data issue error 535
- Check whether the folder "etc" within /home/"cpanel-username"/etc/ is owned by cpanel-username:mail
If it is not then change it with:
chown username:mail /home/username/etc/ -R
Hope you might find those useful & feel free to share your own special/unique checks on the comments section.