Encryption error when creating creditial in sql 2005

I have to create a proxy account to run xp_cmdshell procedure in 2005 .I tried to create a credintial and it gives me decryption error .Is this was with service master key issue ? .I dont have the old copy of the service master key .Did recreating the master key will resolve the issue.In the server there is no database keys used .Only in msdb there exist ms_agentkey .....The data base was moved from an old server to a new machine 4 years back
Recreating the master key will resolve the error ? Please suggest the alternatives so that i can create the proxy account on the server.