found the issue, the default script didn't create the user@'127.0.0.1' just created user@localhost. i created it manually and now its working like charm. just posting the issue hope it will help others.
You can see if user is created or not using
SELECT User FROM mysql.user;
Or to Create a User with limited rights in mysql shell just use.
CREATE USER newrelic@localhost IDENTIFIED BY 'yourpass';
GRANT PROCESS,REPLICATION CLIENT ON . TO newrelic@localhost;
CREATE USER newrelic@127.0.0.1 IDENTIFIED BY 'yourpass';
GRANT PROCESS,REPLICATION CLIENT ON . TO newrelic@127.0.0.1;
and Define your password in Clean test in mysql json.