All stories are populated by characters. Whether it's a human like you or me, a mythical creature like an elf, an animal, or an object, your novel needs characters to do anything. Sure, you could write a whole story about piece of scenery, but no one would read it. But how can you create good characters?
Step One: Concept
Many times you have an idea for the character you want for your story. But you probably don't know much about him or her. You may want a teenager, a magician, or a certain gender but know nothing else. Other times you might know nothing about the characters you want. That's okay too.
The first step is to learn about your character. Every writer goes about this differently. Some like to know nothing more than name and gender. Others need to write the whole history of the person from when they were born until whenever the story starts. (That seems a tad extreme to me, but if you works for you, that's fine.) I fall in the middle. I like to start by knowing the basics- name, age, gender, family, favorites, and all that.
I suggest finding a character fill-out sheet to use before you start outlining. Often the plot is driven by character actions and if you don't know the character, you may end up with something that doesn't work. Try this character worksheet by Trica Goyer or this one from Writer Owl. You can also look for them in books or online. Find one you like. If you don't want to answer all the questions, don't. If it doesn't have something you want to mention, add it.
Step Two: Deeper Understanding
Once you've written the first draft of your novel, you probably know your character pretty well. But at this point, I like to write a what I call a character sketch. Basically, I just write down everything I can think of about the character. This is an in depth look at whoever I'm writing about and helps me to learn even more about them. I've discovered that her dad likes LEGO or she has a rec room downstairs. You don't have to do it in this order. You may want to start by doing this step. This is how I do it.
Then as I edit, I refer to the character worksheets and sketches frequently, to make sure that this is what she would say or do. I use the information I have gathered to make my character more believable. Beware, though, about using everything you know. Just because you think it's really cute how your character and her cousin used to make up songs and sing them to the family when she was five, if it doesn't add to the story, cut it out.
Believability is key when crafting a good character. That means you need to give them flaws, faults, and problems. No one likes a perfect character. Even if you want readers to like your character, which is important, you have to make your character unlikable or flawed at times.
One thing I often find helpful is to actually draw the character. If you're not an artist, don't bother with this. But if you are, try it. Drawing whoever it is helps me fully nail down the character's appearance and posture, and gives me something to look at.
Another option is to make a board on Pinterest for your story. Name it after the story. Then, using Pinterest and Google, look for things that relate to your character. Find the exact shade of her hair and pin that. Know what hairstyle she has? Find a match and put that there. Discover what types of clothes and other stuff she likes and add them. That way you can build a great visual of what he or she looks like. You can also pin all sorts of other things that relate to your story. (Maybe I'll do a post on Pinterest story boarding later. Would you like that?)
Remember, this is all my opinions. Take away what you think you could use. I'm not a pro, I'm still learning myself. How do you craft your characters? Any tips you'd like to share? Tell me in the comments.