Tense has to do with when the story is told.
Tenses are past, present, and future. You can study tenses further in a grammar book, but primarily what you’ll see in fiction is past tense and occasionally present tense.
Present tense is when you’re telling the story as though it’s unfolding right now. Present tense locates the situation in the present time. In fiction it is useful when trying to create a sense of urgency and immediacy. When you’re writing in present tense, the reader experiences the action along with the character and there are no guarantees for the ending.
Past tense is by far the most common tense used in fiction. It places the action in the past and indicates that the events taking place have already happened. This does not mean it’s not as interesting or engaging as something in present tense. If it’s done well, it can be just as captivating. And, it’s much easier to do well than present tense, and in most cases it’s easier to read than present tense, which is why most authors prefer it.
When you mix tense with person, you start to develop the voice in which your story will be written.
Imagine a scenario. For example, the character is trying to unlock a door.
First person, present tense: I stick my key in the hole and jiggle, but nothing happens. Please, please tell me he didn’t give me the wrong key. I do not have time for this.
Third person present tense: She inserts the key slowly, listening for every click of the tumblers. She tenses as the key sticks. This has to work. It just has to.
First person past tense: I jiggled the handle. Locked. Could this day get any worse? On TV they always picked locks with hair pins. Was that even possible? Could I even find hair pins in the bottom of my purse?
Third person past tense: She glanced around. No sign of anyone watching. Listening. Good. She pulled the pins from her hair and inserted them into the lock, feeling the clicks as the tumblers slid into place.
As you can see, different tenses can be useful to accomplish different things, and how you want your story to play out will be accomplished, in part, by what person and what tense you use. As an exercise, try writing the same scene in several different ways and see what works best for you and your story.