I had an issue where I tried to create a custom horse without a BG
It worked, but it was massively out of scale and did not look good at all
Can anyone help me out?
From what I've found, I think the problem is the scale of the image. This image is a 2160 x 360 size image; all (or at least some) of the other custom "horses" are 900 x 150.
Basically, you need cleaner images. I suggest taking from either of these sprite sheets, as they seem to have the sprites you're trying to use:
The Spriter's Resource - PMD: EoT/D
The Spriter's Resource - PMD: RRT