diff --git a/README.md b/README.md
index b897eff..e9dce6b 100644
--- a/README.md
+++ b/README.md
@@ -5,11 +5,32 @@
 ## Setup
 
 #### Configuration
-All configuration needed is done in .configuration.sh.
+The credentials for each environment that could be updated is stored in the
+`env/` directory.
+
+***Example***
+
+`env/default.conf` could look like this:
+```
+#!/bin/bash
+export PSQL_OPTS="-h HOST_NAME -U USER_NAME"
+export DB_NAME=DATABASE_NAME
+```
+
+Create one file for each environment you'd be able to migrate.
+
+When `db-upgrade` is issued, it takes the first part of any name as argument and
+performs the migration on selected environment.
+
+`$ ./db-upgrade localhost` would for example find a file named `localhost.conf`
+and use the credentials inside for the migration.
 
 To avoid having to enter password for selected user on each run, just use a
 [.pgpass](http://www.postgresql.org/docs/9.3/static/libpq-pgpass.html) file.
 
+`db-upgrade` assumes the `default` environment should be used if it's argument
+is omitted. So, start by creating an initial `default.conf` with credentials for your localhost or some non-critical environment.
+
 #### Migration files
 The files in the /migrations directory are changes to the scheme, not the full
 scheme.
@@ -50,5 +71,5 @@ CREATE TABLE database_versions (
 
 To do the actual migration, then just run:
 ```
-# ./db-upgrade
+# ./db-upgrade [ENVIRONMENT NAME]
 ```
diff --git a/env/.gitkeep b/env/.gitkeep
new file mode 100644
index 0000000..e69de29
diff --git a/env/default.conf~ b/env/default.conf~
deleted file mode 100644
index 1468dba..0000000
--- a/env/default.conf~
+++ /dev/null
@@ -1,3 +0,0 @@
-#!/bin/bash
-export PSQL_OPTS="-h localhost -U root"
-export DB_NAME=photowall