Since <em>mi hermana </em>can be replaced by the subject pronoun that matches the third person singular in feminine form, which is <em>ella, </em>then we must use a conjugation matching this person, too. The more logical answer is creyó that comes from the verb creer and is conjugated in the preterite tense. This tense is one of two simple past tenses. It is used to describe actions that took place or were completed at a certain point in the past. Finally:
<em>Mi hermana </em><em>creyó </em><em>en Santa Claus hasta que tenía 13 años (My sister </em><em>believed</em><em> in Santa Claus until she was 13 years old)</em>