Hi,
Below is the link which explains about the settings of LC written by Anupa Wijesinghe. This is an excellent document to understand the configurations and other settings done for LC process.
http://www.learnsaptips.com/2011/09/how-to-handle-letter-of-credit-in-sap.html
You will have the explanation of using credit management with LC process in the last pages of the document. If you want to use both LC document as well as credit management you have to assign the financial document number in he order header or item and besides this field you will have the % field which indicates the % of amount to be used from LC document and the remaining amount will be covered by credit management. If the LC validity is expired then system will block the document automatically. If for the remaining % credit I not available then also system will block the document.