One of the unfortunate truths about people is that wherever there are groups of them, someone is talking about somebody to someone else. Depending on the people involved, this can be either a good thing, or a bad thing, but when you’re developing characters, it can also be a useful thing.
As an exercise: To help in the early stages of building a character, write down three rumors that might be going around about them. One good, one bad and one false. Consider things like where they come from, their trade, their current relationship status. Also keep in mind how prejudice plays a role in creating rumors: someone belonging to a minority group often faces false rumors that can be damaging to their reputation.
If you want to take this a step further, consider how your each of your characters reacts to hearing these rumors, both about them and about the others.