Solution:
TLDR: Login using the built-in console to change the default password. Use the new password to SSH.
The reason you’re getting this error is because you’re trying to SSH into DigitalOcean using the default root password.
Open the Droplet back-end and find the Console button:
Now login from here with root and your default password (Paste it with Ctrl+V). It will ask you to change the password immediately. You’ll have to paste in the default password one more time. Now type in a new password twice. That’s it. You should be able to SSH with WinSCP or PuTTy without issues now using the new password. Enjoy!