404 URL can effect on keyword ranking

[Fitmovers]

Yes, 404 URLs can affect keyword rankings indirectly, especially if important pages or backlinks point to URLs returning 404.

Unimportant/removed URLs: Usually no major ranking issue.
Important ranking page returning 404: Can lose its rankings and organic traffic.
Backlinks pointing to a 404: You may lose the SEO value those links could provide.
Moved page: Use a 301 redirect to the most relevant replacement page.
Permanently removed page with no replacement: A 404/410 is generally appropriate.

[suwaidionlineuae]

Removed pages: If an important page returns 404 and has backlinks or organic traffic, you may lose the rankings and traffic associated with that page.
Internal links: Broken internal links can make it harder for users and search engines to navigate your site.
Lost link equity: If a deleted URL has valuable backlinks, consider a 301 redirect to the most relevant replacement page.
Unnecessary redirects: Don't redirect every 404 to the homepage. Redirect only when there is a genuinely relevant alternative.
Normal 404s: URLs that never existed or were intentionally removed are generally fine; Google expects websites to have some 404 responses.