Rain scald is another name for rain rot which is a bacterial skin infection. This infection is opportunistic, meaning that there have to be things which break down the skin's defenses for it to take hold. Generally, damp conditions and scrapes though in a horse with poor nutrition or overall poor health the skin simply may not be as healthy and protective as it should be. So, a key part of treatment is removing the horse from the damp conditions and providing good nutrition.
MTG can be used, however it is a sulphur based product and can be very hard on the skin. Sulpher shampoos/treatments used to be used for lots of skin conditions but now we have better options that are effective without being harsh. And one of those is something that most horse owners have on hand---betadine. You need to remove the scabs and get rid of them. Then treat the affected areas with betadine (solution can be left on, scrub needs to be rinsed off) daily. In severe or chronic cases, systemic antibiotics may be necessary as well.
Licensed Veterinary Technician