Have a look here:
Keep in mind that you can use a different connection file for local and production, so there is no need to ask your provider to change anything. I add REMOTE to the connection file name on my local machine in case I accidentally overwrite the remote file with the one used in local testing. Then I can just upload the backup and change the name back.
If your local testing server is an older version, you might consider a new install of XAMPP to remove the password version problem. It might also be that your host is using an older version.