The answer is that the credentials stored in the on-premises data gateway for the SQL Server have changed or expired. This is the most likely cause because when a Power BI dataset refreshes from an on-premises SQL Server, the gateway acts as a bridge, using its own stored credentials to authenticate the connection; if those credentials are rotated or become invalid, the gateway cannot establish the link, triggering the exact error message. On the Microsoft Power BI Data Analyst PL-300 exam, this question tests your understanding of gateway authentication flows and common refresh failure points—a frequent trap is assuming the issue lies with the dataset’s source settings rather than the gateway’s stored secrets. Remember the key distinction: dataset credentials are for cloud sources, while gateway credentials handle on-premises handshakes. A useful memory tip is “Gateway guards the gate—if its key fails, the refresh derails.”
PL-300 Prepare the data Practice Question
This PL-300 practice question tests your understanding of prepare the data. The scenario asks you to isolate a root cause — eliminate options that address a different problem before choosing. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
You have a Power BI dataset that refreshes daily from an on-premises SQL Server database. The refresh fails with an error 'The data source credentials cannot be used for the connection'. What is the most likely cause?
Clue words in this question
Noticing these words before you look at the options changes how you read each choice.
Clue: "most likely"
Why it matters: Probability qualifier — the question wants the most probable cause or outcome, not a guaranteed one. Eliminate low-probability options.
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
The credentials stored in the gateway for the SQL Server have changed or expired.
Option C is correct because the error 'The data source credentials cannot be used for the connection' specifically indicates that the credentials stored in the on-premises data gateway for the SQL Server data source have changed or expired. When a Power BI dataset refreshes from an on-premises SQL Server via a gateway, the gateway uses stored credentials to authenticate; if those credentials are no longer valid (e.g., password was rotated), the connection fails with this exact error.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
The dataset is using DirectQuery and the connection string is incorrect.
Why it's wrong here
The error message points to credentials.
✓
The credentials stored in the gateway for the SQL Server have changed or expired.
Why this is correct
This is a common credential issue.
Clue confirmation
The clue word "most likely" in the question point toward this answer.
Related concept
Read the scenario before looking for a memorised answer.
✗
The SQL Server is not accessible from the cloud.
Why it's wrong here
The error is about credentials, not connectivity.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse a credentials error with a connectivity error (like the gateway being offline or the server being unreachable), but the specific wording 'credentials cannot be used' points directly to authentication failure, not network or gateway availability.
Detailed technical explanation
How to think about this question
The on-premises data gateway uses Windows Authentication or SQL Server Authentication credentials stored in the gateway's data source settings. When the password is changed on the SQL Server or Active Directory, the gateway's cached credentials become stale, causing the 'credentials cannot be used' error. In a real-world scenario, this often occurs after a mandatory password rotation policy is enforced, and the gateway data source settings are not updated accordingly, requiring the gateway administrator to re-enter the credentials in the Power BI service.
KKey Concepts to Remember
Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.
TExam Day Tips
→Watch for words such as best, first, most likely and least administrative effort.
→Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A company's IT admin needs to give a contractor read-only access to production logs without sharing account credentials. Using role-based access control (RBAC) and temporary scoped permissions — not a permanent shared password — is the correct pattern. Questions like this test whether you can apply least-privilege access across cloud identity services.
What to study next
Got this wrong? Here's your next step.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Prepare the data — This question tests Prepare the data — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: The credentials stored in the gateway for the SQL Server have changed or expired. — Option C is correct because the error 'The data source credentials cannot be used for the connection' specifically indicates that the credentials stored in the on-premises data gateway for the SQL Server data source have changed or expired. When a Power BI dataset refreshes from an on-premises SQL Server via a gateway, the gateway uses stored credentials to authenticate; if those credentials are no longer valid (e.g., password was rotated), the connection fails with this exact error.
What should I do if I get this PL-300 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Are there clue words in this question I should notice?
Yes — watch for: "most likely". Probability qualifier — the question wants the most probable cause or outcome, not a guaranteed one. Eliminate low-probability options.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Question Discussion
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