Are your characters believable?

Of late, I've been reading lots--and reading about lots--of different children's fiction. Throw in some of adult reading and nonfiction, assigned writing and many imaginary (and real) protagonists have invaded my mind. While not all are memorable or seem true to their own characterization, many authors succeed in doing both.
Often when constructing a fictional character, we borrow bits and pieces from life. But how frequently do you learn something in real life--someone's romantic difficulties or a high-profile heist--and think to yourself, no one would believe this if it were in a novel?
When developing my stories, I start down one road, sometimes making a flamboyant character, and question whether the reader will believe in her or in course of events. Sometimes I pare down how I might portray a person or an event thinking that by doing so, the reader will trust my fiction more. By doing so, I often find that my readers think the character less believable. Then I read someone else's fiction--a character in an incredible situation. The author has handled it so deftly, that a reader becomes engrossed...and, for pages and pages, believes. That's what I'm striving for.

What about you? When developing your own believable fictional characters, do you stray from your own experiences and embellish elements? Or do you stay close to reality, maybe sticking close to the facts of an event or how people you know would act?

"Happy Holidays!" to all the readers of WOW! Women on Writing. Elizabeth King Humphrey is a writer and creativity coach. Besides contributing to AOL's ParentDish, she blogs at The Write Elizabeth, delving into creativity in everyday places.