This paper develops a theoretical model for the management strategy of non-performing loans that continuously arise in financial institutions such as banks, and provides a framework for quantitatively measuring the word-of-mouth effect thereon. This paper examines the circumstances under which it is financially rational for a financial institution to repeatedly extend loans to customers despite their poor credit, after screening customer-requested loans and determining customer credit ratings through credit evaluation, and investigates how the financial institution's decisions change the performance of both the institution and its customers through word-of-mouth effects, and how customer decisions and the financial institution's strategies change according to the competitive market structure. According to the model, the influence of word-of-mouth effects shows that a firm strategy toward delinquent customers is more effective when competition is introduced rather than under monopoly, and when word-of-mouth effects are greater due to the internet and similar channels. This is a theoretical paper that goes beyond the management of customer credit evaluation by financial institutions to examine financial institutions' decision-making from the customer perspective, demonstrating how financial institutions' strategies change through word-of-mouth effects in response to changes in competitive structure and competitors' strategy modifications.