To enable health monitoring and fault diagnosis of PV modules using current-voltage characteristics (I–V curves), it is generally necessary to correct the I–V curves measured under different environmental conditions to the standard condition. The most common correction methods are those from IEC 60891: 2021 standard. However, these methods can introduce significant errors when dealing with degraded PV modules due to the inability to account for changes in resistance. To address this, we propose an improved I–V curve procedure, denoted Pdynamic, which considers different types of degradation by dynamically deriving the correction coefficients from the measured I–V curves. To evaluate the performance, we simulate I–V curves across a wide range of irradiance and temperature for the healthy and degraded module, where the degradation involves increased series resistance, decreased shunt resistance, or both. The results reveal that Pdynamic can produce corrected I–V curves closer to the reference ones than Procedures 1, 2, and 4 of the IEC 60891:2021 standard. Moreover, Pdynamic exhibits resilience to both seasonal fluctuations and varying levels of degradation. These results highlight Pdynamic as a promising and robust I–V curve correction method, particularly for degraded PV modules. A Python-based open-source tool for this procedure is also available at https://github.com/DuraMAT/IVcorrection.