Although modern leather workers cut designs into the leather, early medieval examples seem to have been simply pressed into the surface.
Note that the archaeological evidence suggests that tooling was most often used to decorate knife sheaths, and is in fact universal on seax sheaths. It does not appear to have been used to decorate belts dated to our period and there is limited evidence for its use on sword scabbards and is mostly limited to lines and not intricate decorative patterns or zoomorphs.
You can only tool vegetable tanned leather; it is impossible to tool chrome (unacceptable anyway), and difficult to tool dyed leather. Thicker leather is easier to tool because you can get deeper marks in it. Tooling is extremely easy – all you need is a piece of leather, a wet rag, and a stylus. A stylus made from bone or wood looks impressive, but a ball point pen that has run out of ink is ideal if you are working at home. Dampen the surface of the leather with your rag and it will become soft. The wetter you get it the softer it will become. If you soak the leather, you will find the design tends to come out again as you work, so experiment to find out how wet your leather needs to be.
To get the design into the leather just press down hard and draw with your stylus as if it were a pen. If the leather is wet enough you will find the line you have drawn stays in the leather. If the line is not deep enough for you, keep going over it again and again. If you make a mistake you can rub it out by taking the leather between your hands and flexing it then rubbing with the back of a spoon to smooth the area.