What's the best way to deal with a lying kid?

My nine year old daughter tells huge lies quite frequently. A lot of times they involve a girl at school being mean to her. When I tell her I’m going to call the school and find out what’s going on she breaks down and says she’s just making it all up. When I ask her why she’s lying about things she says she just likes to make stuff up.

Is this something I should worry too much about? Will she grow out of it? It’s getting to the point where I have trouble believing everything she is telling me. She is a very artistic child and always has her head in the clouds. She loves to write stories and illustrate them. I think her lying is just an extension of her stories but I don’t want it to get out of hand.