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Ranks are rows that go from side to side across the chessboard and are referred to by numbers. Each chessboard has eight ranks, which are numbered from the bottom of the board (where the white pieces start) on up.
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Files are columns that go up and down the chessboard, and each board has eight of them. Because numbers indicate ranks, letters indicate files, which are labeled from left to right.
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The naming conventions for ranks and files allows you to give an identifier to every square by using what chess people call the file-first method. For example, the lower right-hand square is called h1. This name is shorthand for h-file, first rank.