So I met this talented guy who designs graphics for apps and such and I asked him if he can make a background image for my app..He agreed and made one for me and I asked him if it was ok if I use the image for my app and he said yes..Now the question is, does it mean I can freely use the image in my app WITHOUT crediting him or paying him?
You have a verbal contract right now to use the image for the app, but if you have questions about the scope and duration of the agreement - and you should, because it's obvious that the contract is not clear when it comes to what you are concerned about, namely what sounds like unlimited commercial use of the artwork - you should to work it out now with the artist now before you use it and both of you have regrets later.
As pointed out, if you haven't given anything in exchange for the use of the graphic, you may not have a valid contract. See What is a contract and what is required for them to be valid?
The simplest thing to do is be up front and ask him about credit and payment for use: how much, how can I use it, do I need to credit you, etc. These are all fair questions, and I doubt he will be annoyed. If he is commercial artist, he will be familiar with such agreements. If he is just starting out in the field, he should learn about these kinds of agreements and not keep them so casual. And you should learn about use of graphics and copyright laws, too.
Arrive at an agreement and either keep it verbal - not the greatest idea:
Despite popular belief, oral contracts are enforceable. They usually are not in your best interests, and end in a "he said, she said" battle. - See more at: http://blogs.findlaw.com/law_and_life/2011/10/are-oral-contracts-enforceable.html
Or write it out in simple English, both sign it and date it. You don't need to get a simple contract notarized or have a lawyer draw one up. If you do want a written contract that covers all the bases, a quick Google search will give you free templates for graphic art usage contracts from websites that specialize in the business of graphic arts.
A promise to credit the artist could be valid consideration for a non-exclusive license, if you both agree. For the mater of that, a license is basically permission to use a work, and need not be a valid contract. It can be just a gift. Most CC licenses are not contracts at all, because there is no specific agreement between the licensor and the licensee, and perhaps no consideration.
While you could rely on your current verbal license, you would in my view be much wiser to tie down the terms a bit, getting the artist to say under what conditions you may use the work, whether you are expected to pay (and if so hoe much), and what form of credit, if any you are expected to give, and any other terms. For example, are you expected to include a copyright notice for the art?
You could write a letter and ask the artist to write back or sign and return your letter, or exchange email -- either would result in a written agreement.
By the way, in the US at least a contract to transfer (by sale or gift) a copyright must be in writing, but a license need not be.