QB Issue Resolution:

Yes, if there is an available bill credit that can be used to pay the bills from a vendor, then, the option Set Credits should be clickable once you check the Vendor Bill from the list of Bills to be Paid.

I believe it would be best to check if the same problem happens on other vendors and on a sample company file to better isolate the issue.

You may open up a sample company file by going to File menu> Close Company/Logoff> No Company Open> Open a sample file

It would also be helpful if you could attach a screen shot of the vendor Open Balance report.

Go to Vendor Center> Right click on the Vendor Name> Open Balance

Please let me know the results.

Resolution for Issue 'How do I apply credits to a vendor payment if they do not show in the bill pay screen?' available: Yes (Solved).
Source: Intuit Community forum.

How do I apply credits to a vendor payment if they do not show in the bill pay screen?: this issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the issue yourself by looking for a resolution described below. If it is a complex issue or you are unable to solve the issue, you may contact us by clicking here or by using other support options.

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