Broken links can negatively impact your website in several ways, even though search engines don't directly penalize you for having broken links.
Here are the most serious issues caused by broken links:
Bad User Experience - When users click on a backlink expecting relevant content but are met with a 404 error page, it leads to frustration and disappointment.
Lower Search Rankings - Search engines use backlinks as one of the indicators of a webpage's quality and relevance. Broken backlinks fail to pass on 'link juice,' or the value that one page passes to another, which can weaken the site's overall SEO profile.
Loss of Potential Traffic - A functional backlink can direct valuable traffic to a website. When a backlink is broken, this potential flow of visitors is lost, which could have otherwise contributed to higher engagement, conversions, or sales.
Credibility Damage - Websites with numerous broken backlinks can appear neglected or outdated, which can harm the site's credibility and authority in its subject matter. Users and other websites may be less likely to link to or recommend a site that doesn't maintain its links.
Crawling and Indexing Issues - Broken backlinks can lead to inefficient use of search engine resources. If a search engine frequently encounters broken links, it may index your site less frequently.