The dynamic system response curve (DSRC) has its origin in correcting model variables of hydrologic models to improve the accuracy of flood prediction. The DSRC method can lead to unstable performance since the least squares (LS) method, employed by DSRC to estimate the errors, often breaks down for ill-posed problems. A previous study has shown that under certain assumptions the DSRC method can be regarded as a specific form of the numerical solution of the Fredholm equation of the first kind, which is a typical ill-posed problem. This paper introduces the truncated singular value decomposition (TSVD) to propose an improved version of the DSRC method (TSVD-DSRC). The proposed method is extended to correct the initial conditions of a conceptual hydrological model. The usefulness of the proposed method is first demonstrated via a synthetic case study where both the perturbed initial conditions, the true initial conditions, and the corrected initial conditions are precisely known. Then the proposed method is used in two real basins. The results measured by two different criteria clearly demonstrate that correcting the initial conditions of hydrological models has significantly improved the model performance. Similar good results are obtained for the real case study.