problem solved
In the users file there is a line like this:
DEFAULT Auth-Type=System
Fall-Through=1
It needs to be changed to:
DEFAULT Auth-Type=Local
Fall-Through=1
or the SQL database will not work. Have you done that? This line in the reject message leads me to believe that may not be complete:
No authenticate method (Auth-Type) configuration found for the request: Rejecting the user
Also, in the radiusd.conf file, insure in the ‘authorize’ section that ‘sql’ is not remarked out. It should be
sql
not
#sql
I will take a look, pretty appreciated for the fast answer friend, thanks! I will give info what happened after the change
You are welcome. The reason I am so good at reading those reject messages is NOT because I have always been good at this. I saw hundreds (dozens actually. It just seemed like hundreds!) of those before I figured all this out. 
I allmost banged my head out of the wall, i’ve tried changing freeradius versions, linux distros i tried allot of combinations was always stucking at the same point, there is nothing about this modification in users file which you’re saying in the guides/userlists .. anyway i will post what happened in a few hours
Just by the reject message, I will almost bet money, if you check both those, it will work. 
ADD: And that is the output from
radiusd -X
not the reject message.
My bad.
Yes, thats from radiusd -X output, i will let you know sooner how did it go
After adding in users file:
DEFAULT Auth-Type=Local
Fall-Through=1
This is on the shell output:
[root@airo ~]# radtest test-user test-pass localhost 0 testing123
Sending Access-Request of id 15 to 127.0.0.1 port 1812
User-Name = "test-user"
User-Password = "test-pass"
NAS-IP-Address = 127.0.0.1
NAS-Port = 0
rad_recv: Access-Reject packet from host 127.0.0.1 port 1812, id=15, length=20
This is radiusdb -X output
rad_recv: Access-Request packet from host 127.0.0.1 port 40404, id=15, length=61
User-Name = "test-user"
User-Password = "test-pass"
NAS-IP-Address = 127.0.0.1
NAS-Port = 0
+- entering group authorize {...}
++[preprocess] returns ok
++[chap] returns noop
++[mschap] returns noop
[suffix] No '@' in User-Name = "test-user", looking up realm NULL
[suffix] No such realm "NULL"
++[suffix] returns noop
[eap] No EAP-Message, not doing EAP
++[eap] returns noop
++[unix] returns notfound
[files] users: Matched entry DEFAULT at line 205
++[files] returns ok
++[expiration] returns noop
++[logintime] returns noop
[pap] WARNING! No "known good" password found for the user. Authentication may fail because of this.
++[pap] returns noop
Found Auth-Type = Local
WARNING: Please update your configuration, and remove 'Auth-Type = Local'
WARNING: Use the PAP or CHAP modules instead.
No "known good" password was configured for the user.
As a result, we cannot authenticate the user.
Failed to authenticate the user.
Using Post-Auth-Type Reject
+- entering group REJECT {...}
[attr_filter.access_reject] expand: %{User-Name} -> test-user
attr_filter: Matched entry DEFAULT at line 11
++[attr_filter.access_reject] returns updated
Delaying reject of request 1 for 1 seconds
Going to the next request
Waking up in 0.9 seconds.
Sending delayed reject for request 1
Sending Access-Reject of id 15 to 127.0.0.1 port 40404
Waking up in 4.9 seconds.
Cleaning up request 1 ID 15 with timestamp +113
Ready to process requests.
It is not checking with MySQL at all. I just did a fresh install of MySQL and FreeRadius on one of my servers, and it is already working. Here is a good radius/mysql negotiation:
rad_recv: Access-Request packet from host 127.0.0.1:32772, id=84, length=55
User-Name = "tim"
User-Password = "badpass"
NAS-IP-Address = 255.255.255.255
NAS-Port = 0
Processing the authorize section of radiusd.conf
modcall: entering group authorize for request 0
modcall[authorize]: module "preprocess" returns ok for request 0
modcall[authorize]: module "chap" returns noop for request 0
modcall[authorize]: module "mschap" returns noop for request 0
rlm_realm: No '@' in User-Name = "tim", looking up realm NULL
rlm_realm: No such realm "NULL"
modcall[authorize]: module "suffix" returns noop for request 0
rlm_eap: No EAP-Message, not doing EAP
modcall[authorize]: module "eap" returns noop for request 0
users: Matched entry DEFAULT at line 152
modcall[authorize]: module "files" returns ok for request 0
radius_xlat: 'tim'
rlm_sql (sql): sql_set_user escaped user --> 'tim'
radius_xlat: 'SELECT id, UserName, Attribute, Value, op FROM radcheck
WHERE Username = 'tim' ORDER BY id'
rlm_sql (sql): Reserving sql socket id: 4
radius_xlat: 'SELECT radgroupcheck.id,radgroupcheck.GroupName,radgroupcheck.Att
ribute,radgroupcheck.Value,radgroupcheck.op FROM radgroupcheck,usergroup WHERE
usergroup.Username = 'tim' AND usergroup.GroupName = radgroupcheck.GroupName ORD
ER BY radgroupcheck.id'
radius_xlat: 'SELECT id, UserName, Attribute, Value, op FROM radreply
WHERE Username = 'tim' ORDER BY id'
radius_xlat: 'SELECT radgroupreply.id,radgroupreply.GroupName,radgroupreply.Att
ribute,radgroupreply.Value,radgroupreply.op FROM radgroupreply,usergroup WHERE usergroup.Username = 'tim' AND usergroup.GroupName = radgroupreply.GroupName ORD ER BY radgroupreply.id'
rlm_sql (sql): Released sql socket id: 4
modcall[authorize]: module "sql" returns ok for request 0
modcall: leaving group authorize (returns ok) for request 0
rad_check_password: Found Auth-Type Local
auth: type Local
auth: user supplied User-Password matches local User-Password
Processing the session section of radiusd.conf
modcall: entering group session for request 0
radius_xlat: '/var/log/radius/radutmp'
radius_xlat: 'tim'
modcall[session]: module "radutmp" returns ok for request 0
modcall: leaving group session (returns ok) for request 0
Sending Access-Accept of id 84 to 127.0.0.1 port 32772
Acct-Interim-Interval = 600
Idle-Timeout = 3600
Mikrotik-Group = "managers"
Finished request 0
Going to the next request
--- Walking the entire request list ---
Waking up in 6 seconds...
--- Walking the entire request list ---
Cleaning up request 0 ID 84 with timestamp 497e3156
Nothing to do. Sleeping until we see a request.
It appears the authorize sql is either remarked out, or the include file is not being loaded.
My version uses mysql.conf and has this in radiusd.conf (by default was remarked out)
$INCLUDE ${confdir}/mysql.conf
Insure yours is not remarked out.
And it would not work without this setting in the users file:
DEFAULT Auth-Type = Local
Fall-Through=1
ADD: This is the newest version of each that I could get from my repository. Both are newer than I am used to, but both worked fine.
xxxx
Any chance of explaining here, without the need for asking??
OK, apo, here is where the “pay it forward” comes in. Let’s say you don’t owe me a beer, but you owe me the way you did it here on this thread!
It doesn’t have to be real detailed, but generally would be good. What did you do different that made it work this time?