WHAT IS SQL SERVER CREDENTIAL?

SQL Server credential stores the authentication information which is required to access a resource.

Credentials store the following details:

• Credential Name – Name of the credential, this is used for refereceing the credential
• Identity – This is basically the username
• Password – Password of the identity/username.
• Encryption Provider – Authentication details can be encrypted using this option.

Basic Example:
[sql]
USE [master]
GO
CREATE CREDENTIAL [credential1] WITH IDENTITY = N’username’, SECRET = N’password’
GO
[/sql]

In the above example Credential1 is created with identity :username and password : password

The created credentials can be used in agent proxies

Reference : Devi Prasad (sqlserverlearner.com)