This is with the base 7.6.1 install (IE before applying any fix packs)? Without more details it's tough to explain what's going wrong. The account utilized is clearly valid on a database server (or you'd get an invalid username/password first). But I would ensure that it's set as the database owner of the database and can open the database successfully using a tool like SQL Management Studio.
If you still can't figure it out, check out the logs of the config tool. You may find more helpful information there. There are multiple log files in the ConfigTool\logs directory that should indicate things like what it's using for the database name, user, server, port, etc. to confirm everything is as you expect. The trace log will provide a lot more granular detail so you can see where it fails. For example, it eventually makes a query like:
sp_helpdb 'DBNAME'
If that doesn't return results or fails as the user, that could potentially be the cause of the issue. It's been a while since I built a 7.6 install but the only time I remember seeing this error is when I forgot to set the schema owner to the database user we created.