My AppleID password is suddenly not being accepted for Xcode 7.1.1 or Application Loader 3

After some investigation the problem was, in my situation, that if you had your AppleID setup for two factor authentication, Apple is now requiring an app specific password to be used with Xcode and Application Loader since this new iTunes Connect upgrade. Neither tool will take your regular AppleID password on the account under preferences anymore.

The information on how to add such passwords onto your AppleID account is at this Apple support link Setup application specific passwords for an AppleID

Once I used the app-specific password instead of my AppleID password, Xcode 7.1.1 and Application Loader 3.1 was happy and completed my archive validation and export and submission for TestFlight as usual.

Log in to https://appleid.apple.com and enter your 2FA code. Then in the Security section on the bottom right area, you'll see:

APP-SPECIFIC PASSWORDS Generate Password...

Click the link to create an app-specific password.

Type in a name for whatever application you are using. Ex. Xcode Application Loader.

Copy the app-specific password.

Enter the password into the Application Loader.