It depends where the wrong password is typed. Such as, In linux command shell, you can only start over if you type the wrong password but in windows and websites you can delete the specific words to correct it.
I usually fix the letters that I typed wrong, if the wrongly typed letter is up to third from the last, otherwise I type the whole password all over again.
If you’re in a personal system then you can use the feature called “show password”, and this will help you type the correct password.
At the end it all comes down to one’s own comfort. How do you prefer to correct it is up to you.