When editing for character, think about how you get to know real people. What traits do they reveal that repeat and serve as "tells" for mood or thought? I once had a boss who closed his eyes when he was about to lie or when he was patronizing me. "Now Peggy," he would say, and his eyes would droop closed. "You know we can't afford to do something like you're proposing." At first I didn't get it (I'm slow). But after while it was a clear signal, one he couldn't seem to control. What a great thing for an author to use in portraying a liar!
We all have uncontrolled habits that send messages: eye contact, hand gestures, stances. A little study of body language and you can inject actions into a manuscript that go along with what a character is thinking. That way you don't have to use tags like "she said coquetteishly." You can give the dialogue and add that she smoothed her hair or touched her chest, both grooming gestures that indicate flirting.
This is the time to make sure your characters separate in the reader's mind. I'm reading a generic "spy book" right now, and I cannot keep the characters straight. They're all smart-talking agents, tough as nails, etc., but there's nothing individual about them. Each time I pick up the book I have to figure out again who is who. I'm probably not going to keep trying much longer.
Making character individual is partly dialogue, as I mentioned earlier in the week. We can make other characters say things about a character that express their opinions of him and give the reader clues to both characters. It's also physical description, but that isn't as important as you might think. We've all read lots of books, so another raven-haired beauty just isn't that much of a standout. It's feeling that we know the people, and more importantly, care about them, that makes a good read. Therefore it's important that the author know his cast first.
Biographies should have been made for each character before you started writing. You asked them where they come from, what happened in their lives that was important to the adult they've become, what they want out of life. You visualized them, what they do all day, where their opinions come from, and how they see themselves fitting into the world. Then you allowed bits of that enter the work piecemeal. Better than a six-line description at the beginning, which is often artificial: "Carol was a dark-skinned, tall brunette with long legs and a minute scar on her left cheek.. She looked like life had been hard on her, but she was coping." I admit, it's convenient and sometimes necessary for lesser characters, but I don't want a police-blotter description of each character who walks on your "stage." Best if the reader picks it up as she goes along.
With a clear view of your characters in mind, your initial writing will go more smoothly. When you edit, you'll have that picture in mind (you may want to reread your initial bios) and ask yourself, "Would a girl whose mother died when she was three do what I have her do on page 98?" Sometimes an added sentence will explain something that doesn't quite fit. Sometimes you'll have to change things to make actions fit characters. Character A might plan a murder, but can he carry it out? If not, he'll have to hire it done or do it long-distance.
So in character editing ask yourself: Does she sound right here? Does the reader know why she's taking this attitude? Are her actions justified by her background? Over the course of the project, each character must make an impression that's believable and worthwhile. Only by editing with just that and nothing else in mind can you make sure you've achieved your goal.