The Judaen Kingdom should have known basic information about its history, lying from whole cloth or portraying its founders in that light isn't very useful to them. Everyone else who comes to rule that area later is made to be illegitimate (by implication) and it's not in the interests of the religious classes either (usually not big on rebellion, except the Hasmonean which never claimed to be descended from David and had their own text).
I think reading Kings as a ancient text with all the typical flaws for the time is the right way to go about it, and the only way we can piece together the evidence (for now, barring some new discovery). Many ancient texts give absurdly inflated counts for armies engaged in battle, but we usually don't follow that by "battle never happened".
What's my suggested account? I don't know. Perhaps David and Solomon existed but their reigns were exaggerated for political and/or nationalistic reasons. Perhaps they were invented out of whole cloth for similar reasons. What I'm more certain of is that the Biblical account here is questionable in a way it isn't in later periods.