A character becomes too real only when that character is an actual person, transposed into words. Obvious exceptions include famous people, especially famous dead people. What would happen to fiction if Abraham Lincoln were off limits? Gore Vidal would have had a hard time meeting his word limit in his book about the president. Seth Grahame-Smith? Not so much.

But if the protagonist is a thinly-veiled copy of the author, or the heroine is someone the author carries a torch for, well, that’s just lazy writing, and worse, prevents real creativity. The real person prevents the story from revealing itself. Also, it becomes an exercise in wish-fulfillment, which isn’t nearly as cool to read as it is to write.