The magnetic susceptibility,&khgr;=∂M/∂H,can be determined for ultrathin films using the surface magneto-optic Kerr effect and an ac technique (ac-MOKE) where the response to a small, modulatedHfield is measured. Optimization of the signal-to-noise ratio is imperative if the measurements are to be used to extract critical scaling exponents from the small tail of &khgr; in the paramagnetic region. These optimal conditions are different than those appropriate for more conventional staticHmeasurements (dc-MOKE) used to generate magnetic hysteresis loops, because the relative noise contributions from the laser stability, sample stability, and detector are changed. A simple method for determining optimum conditions is demonstrated, and the technique is used to show that a 1.8 ML Fe/W(110) film has the critical exponent &ggr; of the 2D Ising model. ©1997 American Institute of Physics.