What exactly is my USGA handicap index and how is it calculated?

When you post your gross score (adjusted for Equitable Stroke Control) on GHIN they subtract the course rating from your gross score to compute your handicap differential for that round. GHIN then takes the lowest 10 differentials of your most recent 20 scores. Your Handicap Index is the average of those 10 lowest differentials multiplied by 0.96. GHIN uses the 0.96 factor to give a slight advantage to the lower handicapper thus giving everyone more incentive to improve their game.