diff --git a/packages/cli/src/public-api/v1/handlers/credentials/__tests__/credentials.service.test.ts b/packages/cli/src/public-api/v1/handlers/credentials/__tests__/credentials.service.test.ts
index a56f7782938e..5126be42ea05 100644
--- a/packages/cli/src/public-api/v1/handlers/credentials/__tests__/credentials.service.test.ts
+++ b/packages/cli/src/public-api/v1/handlers/credentials/__tests__/credentials.service.test.ts
@@ -492,7 +492,7 @@ describe('CredentialsService', () => {
 				jest.mocked(credentialsService.decrypt).mockReturnValue({ apiKey: 'regular-secret' });
 
 				await expect(
-					updateCredential('cred-id', memberUser, {
+					updateCredential(existingCredential, memberUser, {
 						data: { apiKey: '{{ $secrets.vault.myKey }}' },
 					}),
 				).rejects.toThrow('Lacking permissions to reference external secrets in credentials');
@@ -517,7 +517,7 @@ describe('CredentialsService', () => {
 					.mockReturnValue({ apiKey: '{{ $secrets.vault.oldKey }}' });
 
 				await expect(
-					updateCredential('cred-id', memberUser, {
+					updateCredential(existingCredential, memberUser, {
 						data: { apiKey: '{{ $secrets.vault.newKey }}' },
 					}),
 				).rejects.toThrow('Lacking permissions to reference external secrets in credentials');
@@ -546,7 +546,7 @@ describe('CredentialsService', () => {
 				mockExternalSecretsConfig.externalSecretsForProjects = true;
 
 				await expect(
-					updateCredential(existingCredential.id, ownerUser, {
+					updateCredential(existingCredential, ownerUser, {
 						data: { apiKey: secretExpression },
 					}),
 				).rejects.toThrow(
@@ -573,7 +573,7 @@ describe('CredentialsService', () => {
 
 				credentialsRepository.update = jest.fn().mockResolvedValue(undefined);
 
-				await updateCredential('cred-id', memberUser, {
+				await updateCredential(existingCredential, memberUser, {
 					name: 'Updated Name',
 				});
 			});
@@ -595,7 +595,7 @@ describe('CredentialsService', () => {
 
 				credentialsRepository.update = jest.fn().mockResolvedValue(undefined);
 
-				await updateCredential('cred-id', memberUser, {
+				await updateCredential(existingCredential, memberUser, {
 					data: { apiKey: 'another-regular-key' },
 				});
 			});
@@ -617,7 +617,7 @@ describe('CredentialsService', () => {
 					.mockResolvedValue(true);
 				credentialsRepository.update = jest.fn().mockResolvedValue(undefined);
 
-				await updateCredential('cred-id', ownerUser, {
+				await updateCredential(existingCredential, ownerUser, {
 					data: { apiKey: '{{ $secrets.vault.myKey }}' },
 				});
 			});
diff --git a/packages/cli/src/public-api/v1/handlers/credentials/credentials.handler.ts b/packages/cli/src/public-api/v1/handlers/credentials/credentials.handler.ts
index 976236903446..fcdaa93aa08d 100644
--- a/packages/cli/src/public-api/v1/handlers/credentials/credentials.handler.ts
+++ b/packages/cli/src/public-api/v1/handlers/credentials/credentials.handler.ts
@@ -121,7 +121,12 @@ export = {
 		): Promise<express.Response<Partial<CredentialsEntity>>> => {
 			const { id: credentialId } = req.params;
 
-			if (req.body.isGlobal !== undefined) {
+			const existingCredential = await getCredential(credentialId);
+			if (!existingCredential) {
+				return res.status(404).json({ message: 'Credential not found' });
+			}
+
+			if (req.body.isGlobal !== undefined && req.body.isGlobal !== existingCredential.isGlobal) {
 				if (!Container.get(LicenseState).isSharingLicensed()) {
 					return res.status(403).json({ message: 'You are not licensed for sharing credentials' });
 				}
@@ -135,11 +140,7 @@ export = {
 			}
 
 			try {
-				const updatedCredential = await updateCredential(credentialId, req.user, req.body);
-
-				if (!updatedCredential) {
-					return res.status(404).json({ message: 'Credential not found' });
-				}
+				const updatedCredential = await updateCredential(existingCredential, req.user, req.body);
 
 				return res.json(sanitizeCredentials(updatedCredential as CredentialsEntity));
 			} catch (error) {
diff --git a/packages/cli/src/public-api/v1/handlers/credentials/credentials.service.ts b/packages/cli/src/public-api/v1/handlers/credentials/credentials.service.ts
index 2aa112aa0798..17d40a3864e4 100644
--- a/packages/cli/src/public-api/v1/handlers/credentials/credentials.service.ts
+++ b/packages/cli/src/public-api/v1/handlers/credentials/credentials.service.ts
@@ -157,7 +157,7 @@ export async function saveCredential(
 }
 
 export async function updateCredential(
-	credentialId: string,
+	existingCredential: ICredentialsDb,
 	user: User,
 	updateData: {
 		type?: string;
@@ -167,16 +167,13 @@ export async function updateCredential(
 		isResolvable?: boolean;
 		isPartialData?: boolean;
 	},
-): Promise<ICredentialsDb | null> {
-	const existingCredential = await getCredential(credentialId);
-	if (!existingCredential) {
-		return null;
-	}
-
+): Promise<ICredentialsDb> {
 	if (existingCredential.isManaged) {
 		throw new CredentialsIsNotUpdatableError('Managed credentials cannot be updated.');
 	}
 
+	const credentialId = existingCredential.id;
+
 	// Merge the update data with existing credential
 	const credentialData: Partial<CredentialsEntity> = {};
 
@@ -258,7 +255,8 @@ export async function updateCredential(
 
 	await Container.get(CredentialsRepository).update(credentialId, credentialData);
 
-	return await getCredential(credentialId);
+	// credential exists since we just updated it
+	return (await getCredential(credentialId))!;
 }
 
 export async function removeCredential(
diff --git a/packages/cli/test/integration/public-api/credentials.test.ts b/packages/cli/test/integration/public-api/credentials.test.ts
index 1993fb435234..6762bd1d903d 100644
--- a/packages/cli/test/integration/public-api/credentials.test.ts
+++ b/packages/cli/test/integration/public-api/credentials.test.ts
@@ -826,6 +826,37 @@ describe('PATCH /credentials/:id', () => {
 		isSharingLicensedSpy.mockRestore();
 	});
 
+	test('should allow sending isGlobal with same value when sharing is not licensed', async () => {
+		const savedCredential = await saveCredential(dbCredential(), { user: owner });
+
+		// Credential defaults to isGlobal=false, so sending isGlobal=false should succeed
+		const licenseState = Container.get(LicenseState);
+		const isSharingLicensedSpy = jest
+			.spyOn(licenseState, 'isSharingLicensed')
+			.mockReturnValue(false);
+
+		const updatePayload = {
+			name: 'Updated name',
+			isGlobal: false,
+		};
+
+		const response = await authOwnerAgent
+			.patch(`/credentials/${savedCredential.id}`)
+			.send(updatePayload);
+
+		expect(response.statusCode).toBe(200);
+		expect(response.body.name).toBe('Updated name');
+
+		// Verify credential was updated
+		const updatedCredential = await Container.get(CredentialsRepository).findOneByOrFail({
+			id: savedCredential.id,
+		});
+		expect(updatedCredential.name).toBe('Updated name');
+		expect(updatedCredential.isGlobal).toBeFalsy();
+
+		isSharingLicensedSpy.mockRestore();
+	});
+
 	test('should fail to update managed credentials', async () => {
 		const managedCredential = await saveCredential(
 			{ ...dbCredential(), isManaged: true },