A method of compensation for a diamagnetic loop that is magnetically coupled to a concentric stainless-steel vacuum vessel is presented. This compensation method accounts for imperfect magnetic coupling between the vessel eddy currents, the diamagnetic loop, and the plasma diamagnetic currents, and it also corrects for a finite loading resistance on the diamagnetic loop. A procedure for adjusting and calibrating the active-filter compensation circuit is presented. It can be applied to internal or external diamagnetic loops.