Like acid_kewpie said, passwords have absolutely nothing to do with configuring your kernel. In fact, the kernel doesn't really care about passwords and is not involved with them; it just boots and executes 'init'.
If you're building an embedded system using scripts provided by the manufacturer, you really should ask the manufacturer how to change those things. If you want to change them yourself, you can look at the system you've built and edit the /etc/passwd and /etc/group files, and if the system uses shadow passwords, edit /etc/shadow - editing those files, you can add users, put them into appropriate groups, add groups, and set the default passwords.
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