diff --git a/builtin/logical/database/path_roles_test.go b/builtin/logical/database/path_roles_test.go
index 41a2e99758aa..0ad01efe02bc 100644
--- a/builtin/logical/database/path_roles_test.go
+++ b/builtin/logical/database/path_roles_test.go
@@ -1087,6 +1087,76 @@ func TestBackend_StaticRole_Role_name_check(t *testing.T) {
 	}
 }
 
+// TestStaticRole_NewCredentialGeneration verifies that new
+// credentials are generated if a retried credential continues
+// to fail
+func TestStaticRole_NewCredentialGeneration(t *testing.T) {
+	ctx := context.Background()
+	b, storage, mockDB := getBackend(t)
+	defer b.Cleanup(ctx)
+	configureDBMount(t, storage)
+
+	roleName := "hashicorp"
+	createRole(t, b, storage, mockDB, "hashicorp")
+
+	t.Run("rotation failures should generate new password on retry", func(t *testing.T) {
+		// Fail to rotate the role
+		generateWALFromFailedRotation(t, b, storage, mockDB, roleName)
+
+		// Get WAL
+		walIDs := requireWALs(t, storage, 1)
+		wal, err := b.findStaticWAL(ctx, storage, walIDs[0])
+		if err != nil || wal == nil {
+			t.Fatal(err)
+		}
+
+		// Store password
+		initialPassword := wal.NewPassword
+
+		// Rotate role manually and fail again #1 with same password
+		generateWALFromFailedRotation(t, b, storage, mockDB, roleName)
+
+		// Ensure WAL is deleted since retrying password failed
+		requireWALs(t, storage, 0)
+
+		// Successfully rotate the role
+		mockDB.On("UpdateUser", mock.Anything, mock.Anything).
+			Return(v5.UpdateUserResponse{}, nil).
+			Once()
+		_, err = b.HandleRequest(context.Background(), &logical.Request{
+			Operation: logical.UpdateOperation,
+			Path:      "rotate-role/" + roleName,
+			Storage:   storage,
+		})
+		if err != nil {
+			t.Fatal(err)
+		}
+
+		// Ensure WAL is flushed since request was successful
+		requireWALs(t, storage, 0)
+
+		// Read the credential
+		data := map[string]interface{}{}
+		req := &logical.Request{
+			Operation: logical.ReadOperation,
+			Path:      "static-creds/" + roleName,
+			Storage:   storage,
+			Data:      data,
+		}
+
+		resp, err := b.HandleRequest(namespace.RootContext(nil), req)
+		if err != nil || (resp != nil && resp.IsError()) {
+			t.Fatalf("err:%s resp:%#v\n", err, resp)
+		}
+
+		// Confirm successful rotation used new credential
+		// Assert previous failing credential is not being used
+		if resp.Data["password"] == initialPassword {
+			t.Fatalf("expected password to be different after second retry")
+		}
+	})
+}
+
 func TestWALsStillTrackedAfterUpdate(t *testing.T) {
 	ctx := context.Background()
 	b, storage, mockDB := getBackend(t)
diff --git a/builtin/logical/database/rotation.go b/builtin/logical/database/rotation.go
index d4d41cf570b5..3d460915a6c0 100644
--- a/builtin/logical/database/rotation.go
+++ b/builtin/logical/database/rotation.go
@@ -421,6 +421,7 @@ func (b *databaseBackend) setStaticAccount(ctx context.Context, s logical.Storag
 	// Use credential from input if available. This happens if we're restoring from
 	// a WAL item or processing the rotation queue with an item that has a WAL
 	// associated with it
+	var usedCredentialFromPreviousRotation bool
 	if output.WALID != "" {
 		wal, err := b.findStaticWAL(ctx, s, output.WALID)
 		if err != nil {
@@ -448,6 +449,7 @@ func (b *databaseBackend) setStaticAccount(ctx context.Context, s logical.Storag
 				Statements:  statements,
 			}
 			input.Role.StaticAccount.Password = wal.NewPassword
+			usedCredentialFromPreviousRotation = true
 		case wal.CredentialType == v5.CredentialTypeRSAPrivateKey:
 			// Roll forward by using the credential in the existing WAL entry
 			updateReq.CredentialType = v5.CredentialTypeRSAPrivateKey
@@ -456,6 +458,7 @@ func (b *databaseBackend) setStaticAccount(ctx context.Context, s logical.Storag
 				Statements:   statements,
 			}
 			input.Role.StaticAccount.PrivateKey = wal.NewPrivateKey
+			usedCredentialFromPreviousRotation = true
 		}
 	}
 
@@ -530,6 +533,15 @@ func (b *databaseBackend) setStaticAccount(ctx context.Context, s logical.Storag
 	_, err = dbi.database.UpdateUser(ctx, updateReq, false)
 	if err != nil {
 		b.CloseIfShutdown(dbi, err)
+		if usedCredentialFromPreviousRotation {
+			b.Logger().Debug("credential stored in WAL failed, deleting WAL", "role", input.RoleName, "WAL ID", output.WALID)
+			if err := framework.DeleteWAL(ctx, s, output.WALID); err != nil {
+				b.Logger().Warn("failed to delete WAL", "error", err, "WAL ID", output.WALID)
+			}
+
+			// Generate a new WAL entry and credential for next attempt
+			output.WALID = ""
+		}
 		return output, fmt.Errorf("error setting credentials: %w", err)
 	}
 	modified = true
diff --git a/changelog/28989.txt b/changelog/28989.txt
new file mode 100644
index 000000000000..2e5068baeaa8
--- /dev/null
+++ b/changelog/28989.txt
@@ -0,0 +1,3 @@
+```release-note:bug
+secret/db: Update static role rotation to generate a new password after 2 failed attempts.
+```
\ No newline at end of file