Hello MereenaPun, my name is Irisdiel and I am an independent advisor.
It will compress all your files and will free up space.
However, this will require your computer to constantly uncompress any files before opening them, which will greatly reduce performance and is only really recommended for backups/data that is not used often.
You'll need to either keep deleting stuff you don't want or buy a new drive, I'm afraid.
- Irisdiel H.