Error connecting to database: "ORA-12638: credential retrieval failed" (4246070)

User attempts to connect to database and the following error occurs:
ORA-12638: credential retrieval failed

Connection through other applications, such as SQLPLUS, can be accomplished.

WORKAROUND #1:
Reboot machine that has Toad for Oracle installed on it.

WORKAROUND #2:
1. Locate the SQLNET.ORA file under Oracle Home directory
2. Update the SQLNET.AUTHENTICATION_SERVICES parameter and set it to SQLNET.AUTHENTICATION_SERVICES= (NONE).

Note: In case of multiple Oracle homes, ensure the correct file is updated. User Toad's SQLNET Editor of Connection window to update the above file.

The problem may also be solved by reinstalling Toad.