Answer: The moss and lichen suggest, to me, a woodsy theme that would work with the existing shady conditions. You might add hostas, ferns, and other shade loving perennials to create a lovely little garden, possibly along with a few large stones for added seasonal interest, or perhaps a fallen tree trunk.
Slight terracing or a professionally engineered retailing wall might also be something to think about. Plants can sometimes help limit erosion, however they can't solve a serious drainage problem. Adding rocks in and of themselves would not solve any type of drainage problem, either.
If you have issues with severe erosion or water collecting along your foundation you will need to get professional on-site advice about the drainage. You may need to create a system of swales or drains, for example, to solve it. In addition, you may need to make adjustments beginning at the top of the slope to direct run-off away; remember that water always runs downhill. Generally this is a very complex issue best addressed by a professionally trained and degreed landscape architect or other highly trained professional.
I hope this helps begin your thinking about the issue.
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