I think I am going to write a story that is not true about my grandma for this scholarship application.
What is the point in making up a story when you could just tell a real one?
Because I think it will make it more likely I get accepted.
Even if you think lying will help, you should tell the truth on your applications. If it's discovered that you lied, you will definitely be denied the scholarship. You shouldn't include a fake story about your grandma.
But it's not illegal and I'm thinking of how I can write the story to sound convincing so I get the scholarship.
Well you can still write a good story while telling the truth as well. Just try to talk more about how you felt during the story and make the characters emotions very vivid. The story does not need to be completely true, but at least based on a real event that happened to you.