Credit systems for mitigation of bycatch and habitat impact, incentive-based approaches, incentivize changes in fishery operator behavior and decision-making and allow flexibility in a least-cost method. Three types of credit systems, originally developed to address environmental pollution, are presented and evaluated as currently underutilized incentive-based approaches. The first, a cap-and-trade approach, evolved out of direct regulation through restricted limits with flexibility through the creation of tradeable unused portion of the limit, called credits. The second, a penalty-reward system, incentivizes bycatch- and habit-impact- reducing vessel behavior through rewards for positive behavior, and penalties for negative behavior. The third is a hybrid of the first two. All three systems can be used in the context of both absolute (fixed) and relative (rate-based or proportional) credits. Transferable habitat impact credit systems are developed for area management. The cap-and-trade credit system is directly compared to a comparable property rights system in terms of characteristics, strengths, weakness, and applicability. The Scottish Conservation Scheme and halibut bycatch reduction in the Alaskan multispecies groundfish fishery provide real-world examples of success with credit systems. The strengths, weaknesses, and applicability of credit systems are summarized, along with a set of recommendations. Cap-and-trade credit systems provide an important alternative to property rights, such as when rights are not feasible, and for this reason should prove useful for international fisheries. Penalty-reward and hybrid credit systems can substitute for cap-and-trade credit systems or property rights or complement them by addressing a related but otherwise unaddressed issue.