External link is also a kind of backlink. It's a link of one domain on another domain you can say that it's reverse of internal link.
Let, that my site is www.guidepedia.info and I linked it to Google so that is what a external link is.
If any other site is linking you , you do not have a control over it but if someone is linking towards your site you can control it . If you link to websites which are considered as spams or scams, it will effect your page rank. You can say that external link is the main factor of increasing page rank.
If you linked to higher page rank site there is a chance of increasing page rank quickly.
Number of external links to your page makes much more chance for the page to come in the top search engine result.
The point to remember for external link is that it should be linked to the relevant article. You can get external link by commenting, article writing, etc. If the article is about External Links so you must comments on the articles related to External Links.
You can use this codes to make links through commenting:
<a href = "www.guidepedia.info"> Its a complete guide for every search </a>
The sentence highlighted with pink colour will be shown as a link. When some one clicks on it it will be redirected to the site shown in green colour.