diff --git a/homeassistant/components/senz/__init__.py b/homeassistant/components/senz/__init__.py
index bd96d6480e7..a23ff7bb994 100644
--- a/homeassistant/components/senz/__init__.py
+++ b/homeassistant/components/senz/__init__.py
@@ -6,6 +6,7 @@ from datetime import timedelta
 from http import HTTPStatus
 import logging
 
+from aiohttp import ClientResponseError
 from httpx import HTTPStatusError, RequestError
 import jwt
 from pysenz import SENZAPI, Thermostat
@@ -70,11 +71,26 @@ async def async_setup_entry(hass: HomeAssistant, entry: SENZConfigEntry) -> bool
             translation_domain=DOMAIN,
             translation_key="config_entry_not_ready",
         ) from err
+    except ClientResponseError as err:
+        if err.status in (HTTPStatus.UNAUTHORIZED, HTTPStatus.BAD_REQUEST):
+            raise ConfigEntryAuthFailed(
+                translation_domain=DOMAIN,
+                translation_key="config_entry_auth_failed",
+            ) from err
+        raise ConfigEntryNotReady(
+            translation_domain=DOMAIN,
+            translation_key="config_entry_not_ready",
+        ) from err
     except RequestError as err:
         raise ConfigEntryNotReady(
             translation_domain=DOMAIN,
             translation_key="config_entry_not_ready",
         ) from err
+    except Exception as err:
+        raise ConfigEntryAuthFailed(
+            translation_domain=DOMAIN,
+            translation_key="config_entry_auth_failed",
+        ) from err
 
     coordinator: SENZDataUpdateCoordinator = DataUpdateCoordinator(
         hass,
diff --git a/tests/components/senz/test_init.py b/tests/components/senz/test_init.py
index 20b9000fd69..79ee98ab687 100644
--- a/tests/components/senz/test_init.py
+++ b/tests/components/senz/test_init.py
@@ -98,7 +98,7 @@ async def test_migrate_config_entry(
         (
             time.time() - 3600,
             HTTPStatus.INTERNAL_SERVER_ERROR,
-            ConfigEntryState.SETUP_ERROR,
+            ConfigEntryState.SETUP_RETRY,
         ),
     ],
     ids=["unauthorized", "internal_server_error"],