When search engines crawl your site, they see what links to other sites you have and follow them, counting them as you giving a vote to that site. So what about when you link to a poor quality site? Well, that can count against you.
Search engines calculate links to your site as votes for you and links out of your site as votes for those other sites. Another factor that goes into their calculations is the quality and relevancy of the sites you link to.
I have suggested submitting your site to link directories and participating in link exchanges as a method of improving your site's page rank. One thing you should avoid, however, are directories that require you to provide a return link.
Link directories that require a reciprocal link back, particularly if they don't do manual reviews for quality, are considered link farms. Linking to a link farm is bad from search engine perspective.
You want outgoing links from your website to be to quality sites that are relevant to the topic of your site. That being said, search engines give special consideration to blogs (at least at this time) with regard to out going links and seem to give a bit more leniency.
Now suppose you want to add a link to your site and are concerned that it will harm your search engine ranking. There is something you can do to tell search engines not to follow that link.
The code to a typical link should look something like this:
To prevent search engines from counting the link against you, modify the code to add a "no follow" attribute, like this:
So keep building those links back to your site, by submitting to quality directories and participating in link exchanges only with high quality sites. And if you do add an link that may not be beneficial, use the code above.
If you are looking for a free craft directory to submit to, I have a craft directory you are welcome to make a submission and I will review it as expediently as possible.
The card above I made using one of my sister's stamp sets by Stampin' Up called "Be Happy." I also used Le Jardin paper and chocolate chip ink.