As an author you should know your characters life story. Where they have come from, where they are and where they want to be. When I say where have they come from, I don’t mean the pub down the road. I mean what social background have they grown up in? what lifestyle have they lived? what have they experienced? what have the learnt? what have they seen? In the same context, where are they now and what are they striving for? When you understand your character you are more likely to understand their decisions and the choices they would make. You will understand how they will react in certain situations. And you will understand what personal traits they have or need to overcome.
You, as the author, need to know these things. You can discover them as you write, developing your characters on the go, or you can work it out before you start to write, but you should know. While you should know this, your readers do not need to know all the details and they certainly do not need to know your characters life story in one paragraph. A good writer will drop bits of information into the story as they go, building your characters over time, ageing them like a fine whiskey.