I am using schema lite theme and I changed my theme color and some other customization. So if I update schema lite, it will change all of my customized settings.
No! These settings will not change even if you update the theme.
Try using Child Themes. Read more about Child Theme
If i don’t update my theme, is it effect on my site ranking?
Not updating any theme / plugins may result slow speed of your.
Try to keep everything uptodate means update.