iPhone 7 locked due to incorrect Apple ID or password.

Check these articles to reset the password and erase the phone to set it up again:

If you forgot your Apple ID password - Apple Support

If you forgot your iPhone passcode - Apple Support

In case this does not work, and you have proof of purchase documentation, you can start an Activation Lock support request.

You should try to contact Apple ID Support about that. Only the can look into your personal settings:

Get Apple ID Support

Or give them a call:

United States

1-800-275-2273