There a lots of good horror films to be found on Netflix but due to the vast amount of films they stream, they can take a little bit of trawling through ones you aren't interested in to find them.
Fortunately there are some pretty extensive lists to help you!
According to this entry on IMDb, the Netflix rating system doesn't work too well. This is because users rate the content based on their own experiences. I personally wouldn't let 'Beverly Hills Chihuahua' get away with the generous 2 star rating it's been awarded...
In order to give a more well rounded idea of how well received the films have been, this list has been created on the IMDb website listing 230 horrors on Netflix that have been rated 5/10 or above. I usually find their ratings helpful.
Netflix updates its content pretty frequently, with both old favourites and new films, which includes quite a lot of horrors (some pretty terrible ones, but sometimes a cheesy film is in order). Some tips on how to keep up with them can be found here:
Another option is to consider a horror series. There are quite a few of these on Netflix that come highly recommended, and they cater to many tastes. Here's a list covering a few of the main horror types, with trailers for the shows:
• Zombies - The Walking Dead
• Vampires - 7 whole seasons of Buffy The Vampire Slayer!! But if you're looking for something a little more sophisticated, True Blood is recommended by a lot of vampire fans.
• Psychological horror - American Horror Story is modern, very stylish and has succeeded in giving everyone the creeps and keeping them hooked recently.
If you find that the selection on Netflix for your country isn't wide enough, there's a simple way to change that. This particularly applies to people outside of the USA, as their Netflix as loads to choose from.
You can quickly download a safe and discreet service called 'hola.org' which lets you choose which country to tell a website you're accessing it from, at the click of a button. It's very handy and can be downloaded here:
Once you've watched a couple of horror films or TV shows on Netflix, rate them depending on how much you enjoyed them. This will start the process of Netflix personalising your account and from there on it'll be much easier to find things you'll like, as Netflix will suggest them!