When you are reading fiction, you have to suspend your disbelief. You know the story isn't true, the situation isn't true and the characters have not really lived, not in the way that author protrays them BUT you willing suspend that disbelief and enter into the author's world. You want to be able to live there and be a part of it.
If the characters don't ring true, the reader is pulled out.
Reasons for being pulled out included less than likeable characters, protagonists acting ways repellant to reader and the reader can't get her head around it, gaps in motivations/reactions, viewpoint problems, not enough research, failure plant sop that the character comes across as inconsistent and so forth.
Yes, once again I am trying to get to grips with the problem of creating truly memorable characters. And my failings are many. It is about more than filling out a character sheet. It is making sure things are on the page and understanding the back story, making sure the characters reveal the right emotion for the right reason at the right time.
I am currently rereading Creating Characters -- How to Build Story People by Dwight Swain. Slowly but surely I am hoping to improve. Rather than reaching for a new how to book, I am going back to my library and seeing what I can learn or whatI missed the first time.
First rule of thumb -- love your characters as it does show.