Understanding the degradation of lithium-ion batteries is of utmost significance for preventing unexpected capacity drops and addressing safety concerns. The manner in which batteries degrade during operation has a notable influence on their subsequent cycle performance. In particular, the rapid capacity drop related to the spatial heterogeneity of the anode degradation highlights the necessity of a health indicator for an accurate battery diagnosis. A novel health indicator established in this study, the Dominant degradation factors among Negative and Positive electrodes (DNP) scores, enables clear identification of degraded states despite comparable capacity levels. Specifically, batteries with heterogeneous anode degradation exhibited negative scores and the aggravation of the cycle performance. It is anticipated that this health indicator can provide a distinct evaluation of batteries based on their degraded states, supporting onboard battery management and the efficient allocation of resources for the battery reuse industry.