no need to hurt anyone, especially when it comes to something they have no control over. (his parents etc.)
saying something nice would work best.
“she is not available, will think of other ideas for you”.
in shamayim there is a reward not only for completing a shiduch, but also for encouraging and giving someone a positive experience.
and we all need to try to help singles around us!! great mitzva and zchus! choose situations you feel comfortable with and that you can expect to be able to be helpful.