Federal Home Loan Banks (FHLB) of the United States provide funding solutions and liquidity to the borrowing banks in and outside of the United States of America. This paper focuses on the borrower outside of the United States. The FHLBs heavily rely on popular rating agencies to measure the creditworthiness of the members. Available research suggests that the health of banks from the sovereign is dependent on the credit posture of the sovereign, and it is essential to review the sovereign entities of the borrower banks. All major FHLBs use the credit bureau for the credit assessment. This research questions the reliability of the rating agencies for Credit Risk Management. If credit-related information is not processed correctly or communicated properly within FHLBs, the more likely the bank might face unanticipated loss. It is imperative to measure and use improved credit risk management. This research identifies the potential drawbacks of the traditional credit risk management and points to the importance of hybrid solutions for reliable and residual credit risk solution. The paper also describes two of the prominent credit risk analysis techniques.