Circular arguments have no correlation with reality except by chance- you may as well make something up and believe it. It would make about as much sense.
I don't believe this is true. A circular argument is at least internally consistent, and that prunes away a lot of ways to be inconsistent with reality.
This assumes the falsity of skepticism to begin with. Even then, it is possible for a circular argument to be internally inconsistent.
I've raised arguments for philosophical scepticism before, which have mostly been argued against in a Popper-esque manner of arguing that even if we don't know anything with certainty, we can have legitimate knowledge on probabilities.
The problem with this, however, is how you answer a sceptic about the notion of probability having a correlation with reality. Probability depends upon axioms of probability- how are said axioms to be justified? It can't be by definition, or it has no correlation to reality.