A question about bad backlinks...

So we are all aware that bad backlinks are a pretty big red flag for Google, however I am running through our backlink audit for our site on SEMrush and we have a lot of really toxic backlinks according to it and several other backlink audit tools.

The question I am asking is, how do I know what to disavow and what to keep? Looking around online the general guidance is that you should disavow any "bad" backlinks, whilst I am pretty sure a lot of these are "bad", we have not received a manual action by Google and I am not sure how these are impacting our SEO so don't want to disavow them if it will actually hurt rankings.

I'm still pretty new to the SEO sphere with only about a years experience under my belt but was hoping to call on the aid of someone who knows a bit more about this process, Google seems to state that you should only disavow links if they are very spammy and you have received a manual action.

Another reason I am hesitant is we are in a B2B market with some heavy competition for the little traffic this sector sees, one of our competitors has abysmal SEO tactics but buys backlinks like it is going out of style, gaining and losing 10s of thousands per month, a lot from the same domain and are managing to rank higher than us and other sites for certain keywords.

To let you know according to Ahrefs we have about 6k+ backlinks from around 800 domains, looking online we would ideally want a 1:1 ratio (whoops) but is this a feasible goal and is there any merit to the notion of disavowing until almost all links but one are gone from every domain (that isn't complete spammy trash)

Thanks in advance!