This paper presents parameters analysis for the estimated modal damping ratio using a new version of the automated enhanced frequency domain decomposition (AEFDD). The purpose of this study is to provide a better choice of a maximum number of points of time segments and modal assurance criterion (MAC) index number regarding to the variable level of system damping (low and high damped structure) and degree of freedom of the system. According current literature, frequency domain (FD) methods seem to have the problem with providing a correct identification of the modal damping ratio, since the correct estimate of modal damping is still an open problem and often leads to biased estimates. This technique is capable of providing consistent modal parameters estimation, particularly for modal frequencies and mode shapes. As a necessary fundamental condition, the algorithm has been assessed first from computed numerical responses according to random white noise, acting on different shear-type frame structures and corrupted with noise. Results indicate that reducing the value of natural frequencies and modal damping ratios of the modes under analysis demands longer time segments and a high value of the maximum number of points for adequate information on the decaying correlation functions when computing a modal damping ratio. In addition, the results also prove that the MAC index does not significantly affect the results for the low damped system. However, the use of a high MAC index value for the high damped system significantly introduces large error bound and it becomes worse, particularly for the higher modes, as the standard deviation of percentage error increases gradually. Furthermore, the use of a MAC index for a high number of points of time segments significantly increases the standard deviation of the percentage error.