Is it possible that applicant tracking systems are leaving out the most competent candidates and recruiting candidates better at 'creative cv writing?

I see what you mean but you know that CV's are the most important for job-seekers, if an applicant didn't pay it enough attention, he will do the same for the job.

even if the applicant didn't fit for the job 100%, he knew how to right his CV, Isn't that how you can tell someone is smart & creative?

Of course a well presented CV  may get attention from recruiters to consider for selection for interview. It may so happen that a well presented CV may be bogus and the candiate may lack skills and knowledge of job and vice versa. That is why most of the employers and recruiters go for interviews done expert panel and practical tests to assess the real qualities in candidates. I donot think creative cv writing will not help the candidates if they do not have required qualification and skills instead it will back fire. 

Recruiting a systems should make life easier, but it also invites many to apply even they are not completely fit for the job. i am 20 years in HR and still I do not understand that recruiters are not knowing their candidates very well, they keep searching and making adds for good money, and over the years, even you had interviews with them you were hardly called for another cross function. So does a tracking system really works if the recruiter does not make work of who is in his/her file?

I guess so that best candidates are leaving out  on  other hand a growing population, better educated makes the availability of good candidates bigger, and enhanced with a tracking system more efficient, but as said more anomiously.

It is not the applicant tracking systems that are leaving out applicants but only those that manage it.

If you have concerns about 'creative CV writing' it might be worth having a recruitment or human resources professional look at it with you to make sure you are accurately reflecting your skills in the most succinct way. This would give a better response to where you are sending your CV but you need to be applying for jobs that are relevant to get the best success.

Yes, It depends on the types of Filters and Key words set for each and every Criteria.

Practically, Yupp...It is possible.

As recruiters first shortlist candidates by overviewing resumes.

It's much more than possible.  Also, maybe those investing the time, effort and maybe even money to game the system are perhaps the most motivated?  Who knows?  Having automated systems removes human biases, but adds programmer biases.

agree with all expert answers above

it depend on the system you use , also on the criteria you identified in your system

Yes definitely, the recruitment tracking system relies on CVs which are generally over exaggerated in content & do not truly reveal the actual potential of a candidate.More often than not these CV writing portals are just another business ventures & make a tidy sum by writing exaggerated CVs to please their clients. However things have come to such a pass that for every job there are far too many applicants & calling them all for the interview process may not be very practical. Notwithstanding, I am of the firm view that nothing can replace a proper interview as the best method of selection involves the physical presence of as many candidates as can be handled & put through a detailed selection process to include Psychology & aptitude tests, group discussions & personal interview. 

Yes! It is highly possible.

Using an applicant tracking system screens applicants’ CVs according to criteria set by the hiring manager, if the CV format is not readable or not in the format easily understood by the tracking system or software, the CV of most competent candidate maybe at the last placement order where the hiring manager is reading the top most CVs on his tracking system list.