Genuine links to your website from other trusted sites will improve its ranking. A link from a site to yours is effectively a vote for your site that tells Google your site has great content. Google looks at not just the content on the sites that link to you, but also who's linking to them to check the quality of the votes you're getting. The more votes you get from other sites who are in turn getting good votes the greater your chances of improving your ranking.
So, how do you get great links? In simple terms there are two ways, active and passive. Active link building involves going out and asking for them, passive involves creating great content so the links come in without you doing anything.
If you create a great website that offers something useful the chances are you will build a site that eventually ranks well and the rank won't be precarious. Go begging for links or worse still buy links and you are building your castle on sand.