In this paper, finite element models were developed in ABAQUS for studying damage in carbon fiber-reinforced polymer matrix (CFRP) specimens based on the 4-probe electrical resistance method. The concept of effective conducting thickness was leveraged in the development of the electrical finite element models. The 4-probe electrical models were created assuming a linear current-voltage relationship and the damage response was recorded for CFRP materials with varying thickness and layup. Damage was modeled with prescribed shape and location in order to represent failure modes of fiber breakage, matrix cracking, and delamination. Fiber breakage and matrix cracking were identified using the top resistance measurement plane. The top resistance measurement was generally found to be more sensitive to fiber breakage compared to matrix cracking. It was demonstrated, however, that several factors affect the sensitivity of the response to damage including: (1) orientation of the fibers relative to the line of current probes, (2) location of the damage, and (3) type of damage. The material properties were then theoretically optimized such that Ohmic response was achieved throughout the full thickness of the CFRP specimen. With the use of optimal electrical conductivity, the model demonstrated improved sensitivity to fiber breakage near the top and bottom surfaces of the specimen.