Why Repair Holes
The primary reason many homeowners choose to repair the nail holes in their siding is for the decorative aesthetic look. You chose the style and color of the siding to make your home look exactly like you wanted it to, and now it's pock-marked with holes that ruin the appearance. Additionally, if the holes are large enough or there are enough of them, you could face problems coming in from the outside, such as moisture buildup during rainfall or creating entryways for insects during the summer. Filling these holes allows you to keep the outside out and your home insulated and protected.
Vinyl and Aluminum Siding
For vinyl and aluminum siding, seal up the holes with caulk. Don't use the same type of caulk that you would use to seal around your bathtub. Instead, siding specialty retailers sell color-matching caulk, which allows you to fill in the holes with filler the exact color of your siding so that the holes remain inconspicuous. Know the manufacturer and exact color name of your siding, or take a sample with you so that the professionals at the retailer can ensure he gets the color just right. Some retailers may also sell paintable caulk, which allows you to paint the repair work to match your siding.
For wood siding planks, use wood filler putty to cover those ugly nail holes. Like the caulk, filler putty comes in a variety of colors to match the exact wood type you used for your siding. As before, know the manufacturer of your siding, the type of wood and the stain applied to it, or take a sample with you to the hardware or home improvement store to get an accurate color match. If you want to get really detailed, you can even take the time to paint in the grain marks to match the surrounding area, though the missing marks will only be visible from very close up to the holes.
Always clean the siding area that needs to be repaired before getting started. Surface dirt, dust, mud, oil, grease and wax will mar the filler or caulk and ruin the bond, doing little more than creating a mess instead of solving a problem. Wipe down the area with hot water and soap or a solvent cleaner such as mineral spirits. Once the area is dry, apply the filler or caulk. Overfill the damaged area, and use a putty knife or scraper to scrape away the excess, bringing the repair work flush with the rest of the surface. Follow specific product instructions regarding drying time.