In this paper I discuss the costs and benefits of confabulation, focusing on the type of confabulation people engage in when they offer explanations for their attitudes and choices. What makes confabulation costly? In the philosophical literature confabulation is thought to undermine claims to self-knowledge. I argue that when people confabulate they do not necessarily fail at mental-state self-attributions, but offer ill-grounded explanations which often lead to the adoption of other ill-grounded beliefs. What, if anything, makes confabulation beneficial? As people are unaware of the information that would make their explanations accurate, they are not typically in a position to acknowledge their ignorance or provide better-grounded explanations for their attitudes and choices. In such cases, confabulating can have some advantages over offering no explanation because it makes a distinctive contribution to people’s sense of themselves as competent and largely coherent agents. This role of ill-grounded explanations could not be as easily played by better-grounded explanations should these be available. In the end, I speculate about the implications of this conclusion for attempting to eliminate or reduce confabulation.