“Legit” is colloquial, and should only be used in informal conversations, or better avoided if you wish to speak well.
The word is in use so you need to understand it. It is a shortened version of “legitimate” (legitimo).
Some examples of its use:
• Mr. Morales has checked out Mr. Johnson and he has concluded that Mr. Johnson is “legit” (…ha hecho averiguaciones y es de fiar/un tipo legal).
• Sometimes people decide to “go legit” (legalizar la situación). Perhaps things have been done incorrectly or illegally, and the person wants to do things according to the rules.