Ahh, the classic compulsive liar.
https://en.m.wikipedia.org/wiki/Pathological_lying
I feel like the more of them you meet the easier they are to deal with. I've met several, one of my first encounters being a childhood friend's dad who was a near homeless, dirty, chain smoking fuck. He always claimed absurd shit, for example that he was a pilot in WW2 and an Indy Car driver. He wasn't even old enough to have been a WW2 pilot, and the only racing he ever did was to the 7-11 for smokes. So anyways from experience of putting up with this guy and others I've established some methods for dealing with them.
Firstly if you're 1 on 1 calling them out is fairly useless, they'll come up with some more horse shit to throw at you and it will be even more frustrating. It's best to just note what they say, and use the phrase, "oh, yeah," in reply to deflect them. From here if you have an established group of known good mutual friends, then you need to be hanging out with these people and talk behind the problem person's back about their bullshitery.
Next you want to actually call them out but it's best to do so in a group setting so you have others to lean on for a rock solid defence against all of the dumb shit they talk about. As above if you're on the same terms with the other people in the group it's that much easier to call them out. Ultimately the goal is to be more convincing than their lies, and getting them to realize that they're a lying bastard. Anyone who goes against you and agrees with the compulsive liar is seriously undermining your effort of reform; the liar at this point will start to believe their own delusional crap and it just gets even worse.
Sooner or later there's no way for these people to keep it up when no one takes them serious anymore. At this point you've hopefully snapped them back onto a path of a normal mindset; one where they actually see their own bullshit for how absurd it is, not one where they're best bros with Luke Skywalker... If they surpass this they're probably just going to be a scumbag for life and it's probably just best to deal with them as little as possible in most settings.