I'll just say how I do it, using one of my own characters as the guide.
Start with a basic, one sentence concept.
"Snarky old dude with a serious criminal past."
Good, good. Now, to create the backstory, just keep asking "why?"
"Why's he so old?" A: 'cause he's like 50.
"Why's he snarky?" A: 'cause he's really bitter about not being as able as he used to be, and he copes by making fun of other people.
"Why's he got a criminal past?" A: 'cause he used to be a big, big criminal. Basically a retired antag.
"Why retired?" A: 'cause the last job he pulled went really, really wrong.
"Well why is he working on a big station, if he has a criminal past? Wouldn't he be in jail?" A: No, he hid from the SpaceCops instead of actually getting captured when the job went bad.
"How'd he do that?"
And so on and so on. You don't need to come to every eventuality while generating the character, but as you play the character's personality will come through in their actions. When you feel like it, make up some BS to explain why he acts the way he does, connecting it with whatever backstory you already had.