To use existing Credit Note or overpaid invoice to settle another invoice first you need to go to Account on which you want to make an operation and find this credit note under "Invoices" card. Then click on the Credit Note name.
On the next screen you can click a button "Apply credit to"
NOTE: "Apply credit to" button is visible only if balance of the Invoice is negative which means invoice is a credit note or it has been overpaid.
Modal with invoice choices will be open. On this modal you can select Invoice for which you want to apply credit note and how much you want to apply. Note that amount should be negative as it will be subtracted from the target invoice.