I score it with the back of my exacto. I actually files the rear of the blade down with a fine sharpening tool, so it won't really cut through the paper. I do this for both valley and mountains. The cuts go through at least half the paper, so the folds are rather easy.
As for folds on my project, I don't really like to sand down too many edges, so I generally turn my Flat Folding Lines Threshold down to about 160. That keeps the pieces smooth and I can just bend them around how I need them rather than folding them (thus taking out one step of the sanding). Though, you should be wary and make sure to separate any lines that might work better when bent.