External ID and Their Considerations

The ‘External ID’ field is used to reference an ID from external system. External IDs are searchable in Salesforce and you can also use the External ID field to update the record using Apex logic and also use the upsert API call with the External ID to refer to records when using Data Loader. 

Limits:

• 25 External ID fields per object
• you can not create external id if you already reached number of Index fields on the object.