You need to contact the component owner and get the latest component and upgrade the existing component. This will automatically update the version number to the latest version that comes in the latest package.
However some of technical consultants do the 3rd party component upgrade manually by uploading the PHP files manually via FTP and running the SQL commands manually via PhpMyAdmin.
The common mistake make consultants will do to update the version number. Joomla stores the version number in 2 different tables.
Login to PhpMyAdmin and search the component in #_extensions table. Edit the corresponding record and locate the version number in manifest_cache field. Carefully replace the existing version number with the new version number and save the record
Navigate to #_schemas table and search for the same component. Edit the corresponding record and replace the existing version number with the new version number and save the record.