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I know someone that lies as a defense in all of their discussions to win arguments and make them seem like they do the right thing all the time.

Example: One day I heard her claiming to braid a persons hair that she was speaking to despite the fact of that person telling her there was another who did it.

If she wasn't just trying to take the credit and honestly didn't know that she was lying, is there a word that explains people like her?

I don't mean lie so much as in exaggeration because that paticular lie is'nt exaggerating but rather just making up stuff because of jealousy perhaps.There can be many reasons.

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According to Dictionary.com, a pathological liar is:

a person who lies to the point of it being considered a disease or condition, an abnormally habitual liar.

Additionally, according to Wikipedia, a pathological liar:

may be aware they are lying, or may believe they are telling the truth, being unaware that they are relating fantasies.

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