ELO is a rating system originally developed for chess that measures the relative skill level of teams. In college football, it provides a more accurate ranking than traditional polls by empirically considering strength of schedule.
Teams start each season with ELO ratings based on their previous year's final ELO ratings, regressed 5% towards the mean of 1500. New teams or teams without history start at 1500.
ELO ratings can predict game outcomes and point spreads. A team with 50 more ELO points is expected to win by about 3 points on a neutral field.