The effects of vibrations present major hazards and operating limitations ranging from discomfort (including noise), malfunctioning, reduced performance, early breakdown and structural failure which, in the worst case can be catastrophic. Hence, accurate mathematical models are required to describe the vibration characteristics of structures, which subsequently can be used for design purposes to limit the negative effects of vibrations. Finite element (FE) predictions are often called into question when they are in conflict with test results. Inaccuracies in FE models and errors in results predicted by them can arise due to the use of incorrect modeling of boundary conditions, incorrect modeling of joints, and difficulties in modeling of damping. This has led to the development of model updating techniques, which aim at reducing the inaccuracies present in an analytical model in the light of measured dynamic test data. In this paper, a detailed comparison of two approaches of obtaining updated FE models are evaluated with the objective that the frequency response functions (FRFs) obtained from updated FE models are able to predict the measured FRFs accurately. In the first method, the updated FE model is obtained by a direct method, which uses modal data. In the second method, the updated model is obtained by an iterative method, which uses FRF data and is also a parameter-based method. The effectiveness of both methods is evaluated by numerical examples, as well as by actual experimental data. Firstly, a study is performed using a numerical simulation based on fixed-fixed beam structure. The numerical study is followed by a case involving actual measured data for the case of an F-shaped test structure. The updated results have shown that the iterative method gives 20% better matching of FRFs with the experimental data and also the predictions of the iterative method is better than the direct method beyond the considered frequency range. The updated results have shown that the FE model obtained using the response function method, an iterative method, can be used to derive accurate model of the system. Updated models obtained by both methods are subsequently evaluated for its application in dynamic design.