Stealth
Bards are not specialized fighters. Rather, their governing attribute is stealth and they are also extremely good at speechcraft. This doesn't mean you can completely avoid fights. But as a stealth specialist, a Bard is best suited for sneaking around potential enemies, then attacking them on his own terms. So, sneak around as much as possible, scope out possible enemies and attack them before they can attack you.
Swordplay
A Bard specializes in blade weapons. This means you should use a sword as often as possible. This will let you do the most possible damage with each hit, in addition to helping you level up. This is important because Bards are not particularly strong; you need all the help you can get in fights, so it is better to specialize in swords rather than have a host of different weapons.
Magic
People in the Stealth category, like Bards, are not restricted to pure combat or pure magic. As a Bard, one of your main skills is the ability to use illusion magic, so you should capitalize on this skill. Paralyze, for example, will stop your opponents in their tracks, which will let you cut them to pieces with impunity.
Blocking
Try to block often rather than jumping out of the way when you are in fights. A Bard is not very well-suited to jumping, running or otherwise moving quickly. Once you're in a fight, you should commit to it and block your opponent's blows, as blocking is another of the Bard's key skills, and will therefore contribute to you leveling up.