Some writers make the mistake of writing something that actually happened as fiction and when someone says, "It's not believable," the writer says, "But it actually happened that way!" Perhaps the writer should use the event as an anecdote for an article or a personal essay.
Fiction has to be believable. It can't break that willing suspension of disbelief. Yes, we want the reader to feel as if what they are reading actually happened to the characters. However, in story, readers expect a logical progression and a satisfying resolution. Reality often isn't logical, nor does it have a satisfying end, and readers know that.
Does that mean writers can never write about a true event as fiction? Of course not. But the writer has to be willing to step away from what actually happened to make a better story. For example, when my middle grandson was in third grader, he got slapped by a little girl in his class. The slap was witnessed and the girl confessed to slapping him another time, too. It was serious enough she was suspended from school. My grandson couldn't resolve this problem himself. He wasn't allowed to. But could you or I write a story where the slap wasn't witnessed and he had to resolve the problem in some way? Definitely.
Truth also gets used in fiction to add verity. The day after Thanksgiving in 2012, I fell and broke my leg, which required surgery. My fall down a few stairs doesn't make a story. But, I can use much of my experience in bits and pieces in future stories. Need someone to be coming to consciousness after fainting? I know what that feels like and can write about it. Writing about someone in a wheel chair? I now have been personally frustrated by the lack of handicapped parking. Need to describe the flaccidity of muscles not used for several weeks? I witnessed it in my own leg.
Sometimes the truth we need to tell to make a story realistic or believable isn't our truth. I've never been a boy, nor have I raised one, so I have to depend on what I have learned and can learn about boys to write from a boy viewpoint. This is where I personally rely on help from males around me and those who have raised boys. Articles, stories, books, etc. help me in my quest to be realistic, too.
Another place where truth is used judicially in fiction is when the story has an unreliable narrator. Often this is someone who is lying to himself. As the story unfolds the reader learns the character isn't as innocent of wrong doing as he says he is. His actions have shown otherwise.
Another piece of reality we don't use in fiction is how people actually talk. Listen to all the ums, uhs, and sometimes meaningless and often off-topic talk that goes on in many conversations. They'd make boring reading. Every "hello" or "how are you?" or "what do you want for dinner?" isn't necessary in a story either. Fictional dialogue usually has to be much more direct and to the point.
I'll end with this quote from Jay Asher @jayasherguy, "Truth isn't stranger than fiction (unless you haven't read very much fiction), but it often has too many coincidences for fiction." Don't forget it!