Why are link texts important for SEO?

Links are important for SEO: you need to add internal links, for example, to make your site structure clear to search engines. The text of the link helps search engines make sense of your (internal) links; it gives them more context. When you link to other content, Google uses the link text as an indicator of the topic of the linked page. If the link text matches your keyphrase, Google will not be able to tell which article is the most relevant for that topic and should rank for that keyphrase. So yes, anchor text is a ranking factor for Google.

Besides adding context to links for search engines, link text is also important to your users. The anchor text clarifies the value of a link and tells them where it leads them. So, using the focus keyphrase in the link text can be confusing for both search engines and your users. That’s why you should actively avoid competing links