In fiber-reinforced composites, cracks initiate around the fibers aligned transversely to the loading direction. The transverse cracks can potentially cause leakage in specific applications or progress to inter-ply delamination and catastrophic failure. Initiated micro-cracks can go undetected since the instantaneous loss in the composites’ response is negligible. Current experimental and numerical works can mainly predict the macroscopic phenomenon of crack formation and fall short of giving insight into the microscopic event of crack initiation. We studied the crack growth in a realistic representation of fiber-reinforced composites. A gradient-based method to calculate the sensitivity of the transverse failure response with respect to the distribution of the fiber/matrix interface properties was devised. We showed that the distribution of the sensitivities deviates suddenly from a normal distribution from cracks initiation to the formation. This is an important finding since it is numerically and experimentally impractical to distinguish the applied strain level at which cracks initiate. We then extended our simulations to three-dimensional representations of additively manufactured discontinuous fiber-reinforced composites and how damage initiates and propagates in this composite.