A character lives in the current moment of a story. How they arrived at the point is dictated by their backstory. The events, decisions and choices of their past are what has led them to this moment.
The choices that character makes in a story are based on those prior moments plus the ones experienced along with the audience. The combination of these two worlds dictates the choices the character will make going forward.
The backstory provides the events and influences that have acted on your characters to make them who they are when the story begins.
The present story is the one that you, the writer, want to tell. It is the culmination of everything that the character was prior to the moment the story begins; and it is the documentation of the change the character goes through until the conflict is resolved.
The forward story is the world that the audience is left to imagine occurs after the story ends. Sometimes, the writer wants the audience to be certain about that story – lovers live happily ever after, Batman lives on to fight crime, etc. Other times, the writer wants the audience to wonder or disagree about the forward story – in “The Graduate,” when Dustin Hoffman and Katherine Ross are sitting on the bus at the end, the audience is left wondering what they are going to do next?
Psycho, Social, Physio
Character backstory breaks down into three arenas.
Physiological is their age, sex, appearance, heredity, defects, scars and other physical attributes.
Sociological is their class, occupation, education, home life, religion, politics, hobbies, friends, etc.
Psychological addresses ambition, frustrations, self-esteem, temperament, abilities, personality, intelligence, love and sex drive among others.
Show, Don’t Tell
Like people, characters don’t state who they are. This is naked exposition. The way to develop a character is to “peel the onion” in front of the audience’s eyes. By creating situations in which a character has to react, their actions will reveal layers of their character to an audience, each one cutting closer to the core of who they are like the layers of an onion.
Usually, this starts with an audience making a quick impression based on a character’s dominant trait and emotion; then, as events occur, complexities, paradoxes and emotions are revealed that make the audience re-evaluate the character until they have formed a more complex view.
When creating this kind of experience for the audience, it’s important to remember that audience doesn’t need to know everything about a character at first blush. They only need to know enough to understand what’s driving the character. From character’s behavior through the story, they will infer who that character is and what that character’s past may be like.