This paper extends recent work done by the authors in modeling length scale-dependent damage behavior of ceramic matrix composites (CMCs) to include effects of local anisotropy introduced by matrix cracking. This model captures scale-dependent damage initiation and propagation behavior of the brittle matrix by employing internal state variable (ISV) theory within a multiscale modeling framework to obtain damaged matrix stress/strain constitutive relationships at each length scale. The damage ISV captures the effects of matrix cracking and growth by using fracture mechanics and the self-consistent scheme to determine the reduced stiffness of the cracked matrix. Matrix cracks, which activate when stress intensity factors near manufacturing induced cavities exceed the fracture toughness of the material, are assumed to be transversely isotropic in the plane of the crack, and matrix anisotropy occurs when the damaged stiffness tensor is rotated from the crack plane to the global axes. The crack progression and temporal evolution of the damage ISV are governed by fracture mechanics and crack growth kinetics. The model effectively captures first matrix cracking, which is the first significant deviation from linear elasticity. The nonlinear predictive capabilities of the material model are demonstrated for monolithic silicon carbide (SiC) and a 2D woven five-harness satin (5HS) carbon fiber SiC matrix (C/SiC) CMC.