An easy way to fix very small holes in drywall is to fill them with spackling or drywall compound. Holes larger than 1/2 inch in diameter require using a piece of drywall along with joint compound for repairs. Fill small cracks with caulk, which stretches and prevents the cracks from returning.
Prior to repairing small holes, use a hammer to tap the drywall, and create a small indention around the hole. This cavity provides room for the patching material and keeps the repair level with the surface of the wall. Fill the hole and indention with the repair materials, and smooth the repair with a putty knife. Once the material is dry, wet sand so it is smooth. Use the same tapping procedure with wall anchors so they are depressed into the drywall and easier to cover.
If the hole is between 1/2 and 6 inches, cut a piece of drywall that fits the hole, and apply joint compound to hold it in place. For larger holes, use drywall tape to help secure the repair. Once it is dry, wet sand the edges so they feather into the adjoining wall.
Repair cracks that form due to settling using caulking compound. Apply the material, and use your finger or a putty knife to force it into the crack. Clean any excess material from the surface, prime, and paint the repair.