Recently, I tried to access my Hotmail account from my iPhone and I kept getting asked for my password. And, every time that I entered my password, I got rejected. Now entering a password from an iPhone is a challenge, so, I just assumed that I was not hitting the correct keys. But, when I tried to login from my PC, I got the same thing.
Finally, on a whim, I entered my new PC password and it worked!! Apparently, Microsoft only has one password for all of their services whether it is Hotmail or Windows 8.1.